What will dual-listed stocks do tomorrow, and what is expected in the most important market reports?
The global risk level is rising, and in Israel, this trend is joined by renewed tension on several fronts. Government bond yields are approaching dangerous levels. The bar of expectations for Nvidia's reports is sky-high, and some wonder if it can be cleared. Another wave of reports will flood Tel Aviv, with publications from insurance companies Phoenix, Menora, and Harel. Also, a critical inflation figure will be published in the US, and the Fed Chair will face another test. Everything you need to know ahead of the trading week.
1. Events that will influence the trading week
Investors in Israel and around the world are entering a dramatic week, as the risk level in the markets remains high: government bond yields continue to move around multi-decade highs (despite the intervention of the US Treasury), oil prices are climbing, and a trade war is looming between the US and Canada, which imposed new tariffs on each other over the weekend.
In the local context, the rise in the risk level abroad is joined by renewed security tension on several fronts — against the Gaza Strip, against Lebanon, and now also against Syria, following the attack Israel carried out there last week.
Three central events will dictate the direction of the markets in the near future: on Wednesday, Nvidia's reports will be published, which will put the robustness of trading in the AI and chip sectors to the test. Earlier that same day, the PCE report will also be published — the inflation index preferred by the Fed. On Friday, investors' eyes will be on Fed Chair Kevin Warsh, who will speak for the first time at the annual international monetary policy conference in Jackson Hole.
In the reporting season sector in Tel Aviv, several prominent publications are expected: tomorrow (Monday) the first reports of the construction company Tidhar will be published after the IPO, alongside reports from Fox, Navitas, and Shapir Engineering; on Tuesday, Electra, Phoenix, and Menora will publish reports; on Wednesday, Ashtrom and Harel Investments will publish; and on Friday, Aura and Mivtach Shamir will publish.
In the macro sector in Israel, on Tuesday, data from the Central Bureau of Statistics' labor force survey will be published, which are of great importance for the Bank of Israel's interest rate considerations.
2. Is an impossible bar set for Nvidia?
Dual-listed stocks will return from Wall Street with a total negative arbitrage gap of 0.35%. Camtek and Nova will weaken by over 3%, Tower will lose about 1.5%, while Palo Alto and Teva will advance by over 1%.
The local stock exchange concluded the past week with a mixed trend, against the backdrop of negative sentiment in most markets around the world, in light of the jump in US (and other countries') government bond yields to multi-decade highs. The TA-35 index fell by about 0.7%, the TA-90 index advanced by 0.8%, and the TA-125 index weakened by 0.4%.
The rise was led by the insurance index, which jumped by about 5% following the financial results of Clal, which revealed that the volume of its managed assets reached a record of 456 billion shekels. Following it, the TA-Oil and Gas index stood out positively, strengthening by 3.5%, parallel to the rise recorded in global oil prices.
On the other hand, the decline was led by the technology index, which lost about 4.2% of its value. Camtek and Nova stood out particularly negatively, with weekly declines of over 12% and 10%, respectively. Palo Alto shares also concluded a red week, with a decline of over 10%; this, after the stock climbed to its all-time high earlier this month.
Wall Street concluded the past trading week in the red, as the Nasdaq and S&P 500 indices broke a streak of three positive weeks. The Nasdaq fell by about 2%, the S&P 500 lost about 1.4% of its value, and the Dow Jones retreated by 0.9%.
The sector that led the gains is the healthcare sector, which rose by over 4%, mainly thanks to Moderna shares, which more than doubled in value following a successful cancer vaccine trial. As mentioned, chip stocks dragged the market down, as the SOXX ETF, which tracks the sector, fell by 5.5%.
As mentioned, the reports that the chip giant Nvidia will publish are expected to be the focus of the week, with the bar of expectations being very high — and some analysts even find it difficult to say with certainty whether it is truly passable.
Uzi Levy, Director of Securities Research at Mizrahi Tefahot, noted that
"The expectations for the current quarter are very high. The market consensus stands at revenues of about 91.9 billion dollars and an adjusted profit of about 2.08 dollars per share, reflecting growth of about 96% in revenues and 98% in profit compared to the parallel quarter. Nvidia's official forecast stands at 91 billion dollars, in a range of plus or minus 2%, so the market expects a result slightly better than the forecast the company itself provided. The meaning is that a good report in itself will not necessarily be enough — investors are looking for a significant positive surprise."
"The market is not trying to understand if the company continues to grow — but if it can continue to grow at the current unusual pace," explained Levy. "Revenues of over 92 billion dollars, a strong forecast for the next quarter, high demand for Blackwell, and maintaining profitability rates will be an especially positive combination. On the other hand, even a report that beats the forecast might be received with disappointment if the forward forecast is weaker than expected. The options market is pricing a fluctuation of about 6% in the stock around the reports, so the publication is expected to have a significant impact not only on Nvidia, but also on chip stocks and the entire AI sector."
3. The intervention in the US debt market revived Bitcoin and gold
Despite the weakening of the dollar globally, the shekel lost height this week against the American currency, and its continuous rate closed at the end of the week at a level slightly below the 2.99 shekel threshold.
Oil prices climbed in the past week by over 5%, after the US Treasury Secretary told CNBC that the US "will impose the most severe sanctions seen in history" against Iran. The price of Brent crude oil closed around 94 dollars per barrel, while the price of American-type oil (WTI) closed around 86 dollars per barrel.
Also in the commodities market, the price of gold climbed last Friday to a high of more than three months, and stood at about 4,660 dollars per ounce; this, among other things, against the backdrop of the weakening of the dollar globally. At Goldman Sachs, they noted that the moderation in expectations for a near interest rate hike in the US also helped revive interest in the precious metal. It is worth mentioning on this occasion that a weak dollar makes the precious metal more attractive for foreign buyers, and also that its performance tends to weaken in a high-interest environment, as an asset that does not bear interest.
Bitcoin finished the week with a rise of over 20% and traded around 76 thousand dollars. Violeta Todorova, a research analyst at the company Leverage Shares, attributed the jump to three central factors: "The announcement of debt purchases by the US Treasury, which was interpreted as a sign of easing in financial conditions and liquidity — an environment in which Bitcoin tends to flourish; President Trump's call to Congress to promote the Clarity Act law to stabilize regulation in the crypto field; and the breakout of the resistance level at 67,250 dollars, which led to a forced liquidation of short positions in the amount of over a billion dollars."
4. The Fed Chair will face another test
In the US, the first Jackson Hole conference of the new Fed Chair Kevin Warsh arrives at an especially challenging time for him and for the markets, when the 30-year bond yield is at a level of 5.27% — around a high of about two decades.
Many analysts pointed out that the US Treasury's intervention in the debt market in favor of lowering yields undermines Warsh's approach, which advocates for reducing the signals provided by the Fed and relying on the information provided by the markets — so against this background, his words on Friday will be examined under a magnifying glass.
But even before that, on Wednesday, the PCE report for July will be published — the inflation index preferred by the Federal Reserve. It is expected to show a rise of 0.1%, which will reflect a slight decrease in the annual inflation rate from 3.7% to 3.6%. The core index, which excludes energy and food prices, is expected to rise by 0.2%, so the annual core inflation will remain at a level of 3.3%.
In the Israeli macro sector: in the weekly review of Leader Capital Markets, the economists addressed the central considerations standing before the Bank of Israel when it comes to the interest rate decision next Tuesday (on September 1). "The level of geopolitical tension significantly affects the interest rate decision," they wrote at Leader. "Israel's risk premium remains low, both according to the CDS and according to the yield gap between the US and Israel." Bottom line, at Leader they estimate at this stage that there is a 60% probability of an interest rate cut next week, assuming the dollar-shekel rate stabilizes below the 3 shekel threshold.
5. The strategist who warns: The S&P 500 might crash by 20%
The jump in US government bond yields is shaking the markets — and there are those who warn that the stock market is on the verge of a real crash. Philippe Colmar, a global strategy partner at the research firm MRB Partners, told the economic site Business Insider that if long-term yields continue to climb, they might alarm investors in a way that will ignite a drop of between 15% and 20% in the S&P 500.
Colmar recommended to investors who fear further rises in bond yields to reduce exposure to stocks in the AI field and increase exposure to defensive areas of the market, such as the healthcare sector.
