Optimism at the start of the week: Wall Street and Asia futures rise; tension in the Strait of Hormuz increases
Globes presents a first update on the state of global markets. This morning, there is cautious optimism at the start of the trading week against the backdrop of mixed futures on Wall Street and gains on Asian stock exchanges. Japan's growth data missed forecasts. Oil prices remain relatively stable despite uncertainty in the Strait of Hormuz. The 'Hindenburg Omen' raises concerns about a market correction.
Trading review: current reports, trends, indices, stock prices, bonds, currency, commodities, and analyst recommendations. 7:00. Optimism in the markets this morning, as futures on Wall Street trade in a mixed trend and provide a tailwind for the start of the trading week, despite the growing geopolitical uncertainty. The conflict over strategic shipping lanes between the USA and Iran is intensifying, after President Donald Trump declared over the weekend that he intends to declare the Strait of Hormuz an American protectorate and called on US citizens to prepare for a continued surge in fuel prices. On the other hand, Iranian Foreign Minister Abbas Araghchi clarified that the strait "will open and close only under Iran's control," called on Washington to recognize its defeat, and noted that a decision on resuming negotiations has not yet been made.
Asia
In Asia, the main stock exchanges on the continent are starting the trading week with price increases in most leading indices, receiving a strong tailwind from China and South Korea. The KOSPI index in Seoul leads the green trend with a jump of 2.4%, while in Hong Kong the Hang Seng index climbs by 1.6% and the Shanghai index rises by 0.8%. In Japan, the Nikkei index maintains almost complete stability. This morning it was published that Japan's growth data for the second quarter missed market forecasts, as the gross domestic product expanded by only 1.1% on an annualized basis - below expectations that stood at 2%. The data point to weakness in domestic demand and private consumption, which was only partially offset by strong exports. Norihiro Yamaguchi, chief Japan economist at Oxford Economics, warns against continued erosion of purchasing power and predicts that inflation will rise in the second half of the year as companies pass on the increasing costs to consumers.
Wall Street
Futures on Wall Street point to a mixed trend at the start of the week, as the Nasdaq contract rises by 0.3% and the S&P 500 contract climbs by 0.1%, while the Dow Jones index contract records a moderate decline of 0.1%. The New York Stock Exchange closed the week with a mixed trend, as the S&P 500 and Nasdaq indices closed a positive week for the third time in a row. The energy sector led the gains last week, jumping by 7.3% - its largest weekly increase since October 2022. According to FactSet, profit growth within the S&P 500 index is around 50%, a figure that would be the strongest since the second quarter of 2021. At the same time, Alphabet became the third-largest holding in Berkshire Hathaway's portfolio, with data indicating that Berkshire purchased Alphabet shares on the open market in the amount of about 7 billion dollars.
Oil and Currency
Despite the unlimited maritime blockade on the Strait of Hormuz, oil prices show surprising stability and trade around 88.9 dollars per barrel of Brent. The market reacts with restraint due to a decrease in global demand, which is expected to shrink by 1.6 million barrels per day in 2026 according to the International Energy Agency. Phil Flynn, a market analyst at Price Futures Group, explains that the energy market demonstrates dynamism and finds bypass ways to circumvent the blockages. This morning, a barrel of Brent climbs by 0.49% to 88.95 dollars, and a barrel of WTI rises by 0.16% to 82.53 dollars. The shekel arrives at the start of the trading week after an impressive wave of strengthening, showing an increase of about 3.6% against the basket of currencies since the end of July and trading below the threshold of 3 shekels per dollar (representative rate of 2.9540).
Tel Aviv
In Israel, investors will react to the escalation recorded at the end of the week against Hezbollah on the northern border, while in the background also hovers the diplomatic process regarding Gaza and the effort to dismantle Hamas. Dual-listed stocks will return tomorrow with a slight positive arbitrage gap of about 0.2%. Camtek and Nice are expected to weaken by about 5.7% and 4.3%, respectively, while Tower will climb by 4% and Teva will advance by 1.5%. The TA-35 index rose by about 0.8%, the TA-125 index advanced by 0.2%, and the TA-90 index weakened by 2.2%. The defense index led the declines, falling by about 7.8%.
Hindenburg Omen
In the capital market, signals indicating nervousness under the surface are increasing, as the technical indicator "Hindenburg Omen" is activated again. The index is a technical indicator that tries to predict a stock collapse by identifying a situation where a large number of stocks reach both an annual high and an annual low at the same time. Experts clarify that while it is an interesting warning sign, it is not a guarantee of falls, although clusters of warnings over several weeks are considered by analysts to have much more significant weight.
