Stability on Wall Street, after a higher than expected inflation figure

16:55

Wall Street moved to trade in a stable trend, with the three main indices now trading with only minor changes.

In Europe, trading is now conducted with rising rates. The DAX index rises by about 0.6%, the POTSI index advances by about 0.3% and the CAC index advances by about 0.7%.

stock solaredge The Israeli company is now surging in trading, after UBS raised their recommendation on the stock. UBS economists raised their recommendation for SolarEdge stock from “neutral” to “buy” and the target price from $36 to $42 – a 40.6% premium to the current price on the Nasdaq. The Israeli solar energy company is valued at more than $1.8 billion, after the stock rose 186% from its 2024 low, but fell 62% since the beginning of the month June, and especially since the last reports in which the forecast disappointed the market.

UBS notes that the American regulator has expressed concern about cyber threats in converters that are connected to the telecommunications network, a step that usually prevents new models from getting permission to be sold in the US. The bank believes that such a restriction will reduce supply and help Solaredge increase market share and raise prices. UBS raises Solaredge’s adjusted EBITDA forecast for 2027 from $101 million to $110 million dollars, and by 2028 from 173 million dollars to 190 million dollars.

16:30

Wall Street opens the trading day in the red, after the PCE report – the Fed’s preferred inflation measure – showed an increase of 0.2% in July, slightly above expectations of 0.1%. Investors are also eagerly awaiting the financial reports of Nvidia which will be published this evening after the close of trading.

At the beginning of the trading day, the S&P 500 index falls by about 0.1%, the Nasdaq loses its value by about 0.2% and the Dow Jones weakens by about 0.2%. Following the PCE report, the dollar strengthens globally, US government bond yields rise along the entire length of the curve and the probability that the markets are pricing in an interest rate hike by the Fed in September climbed by about 2 percentage points to 40%

The technology giant Meta Metafa, after it was reported a little while ago that it had reached a settlement in a lawsuit filed against it by 29 states in the US, alleging that it had designed its platforms in a way that was addictive to teenagers. CNBC reported that Meta will be forced to make some changes to its apps, including: “blocks during the night” for teenagers who use the Facebook and Instagram apps; “improved age verification measures”, which will prevent children from using the apps; and additional tools for parents According to CNBC’s Jim Cramer, Meta has agreed to pay $12.6 billion, with 7% of that to be paid now.

15:40

The PCE inflation report – the Fed’s preferred inflation index – showed an increase of 0.2% in July, slightly above expectations of 0.1%, and reflects an annual inflation rate of 3.7%. However, the core index, which deducts volatile energy and food prices (and is considered more important by the central bank), rose by 0.2%, so that annual core inflation stood at 3.3%, in line with expectations. Following the report, the sentiment on Wall Street lost a little and government bond yields went up along the entire length of the curve.

Following the report, the sentiment in trading on the futures contracts lost a little, as for now, the contracts on the S&P 500 are down about 0.1%, the contracts on the Nasdaq are losing their value about 0.4% and the contracts on the Dow Jones are trading slightly above their base level.

14:10

Productivity Network Acquires PRN, a media company in the field of in-store advertising, in a deal of up to 12 million dollars. According to the company, the purchase is expected to contribute to profit from the date of its completion and to expand Prion’s activity in the field of retail media.

PRN specializes in digital advertising at points of sale, so the acquisition will allow Prion to reach consumers right before the purchase and expand its activities in the fields of commerce, consumer goods (CPG) and health. The company expects that the combination will attract larger advertising budgets and accelerate growth in the fields of retail media and DOOH (digital out-of-home advertising).

14:07

The contracts on Wall Street trade with only small changes.

The market is eagerly awaiting Nvidia’s report after the lockdown. “A good report will not necessarily be enough – investors are looking for a significant positive surprise. The market is trying to understand whether it can continue to grow at the current exceptional rate,” said Uzi Levy, director of securities research at Mizrachi Tefahot.

Earlier, the US inflation data will be published. The personal consumption price index (PCE) for July, the Fed’s preferred inflation index, will be published this afternoon. The expectation is a monthly increase of 0.1% and annual inflation of 3.6%, a small decrease compared to June. The figure is published when the bond market is in focus. US government bond yields climbed to multi-year highs last week. Yesterday there was a decrease in yields.

On Friday, Fed Chairman Kevin Warsh will arrive in Jackson Hole, as the markets seek an answer: will the Fed continue to fight inflation even at the cost of higher yields – or will it begin to ease the pressure on the debt market.

12:00

Trade in Europe is relatively quiet and in a mixed trend. Paris stands out with an increase of 0.4%, London decreases by 0.2% and Frankfurt increases slightly. Stoxx 600, the general European index unchanged.

10:19

Like Wall Street, trading in Europe opened stably and without substantial changes, Paris stands out a little, rising by 0.3%.

08:08

Oil prices are falling this morning amid declining fears of a military conflict, after the US tends to focus on economic sanctions to put pressure on Iran.

Brent contracts for October delivery fell 2.6% to $86.26 a barrel, while US WTI contracts for October delivery lost 2.6% to $80.25 a barrel.

“The American sanctions on Iran were milder than expected,” said Dan Coatsworth, head of markets at AJ Bell. According to him, the drop in oil prices helped the markets to stabilize, at the same time as the government bond yields dropped from recent record levels.

07:00

The markets open the morning alertly, as investors await two major events: the US inflation figure and Nvidia’s quarterly reports, which will be published after the close of trading. In Asia, trading is mixed, Wall Street contracts are retreating slightly, while the drop in oil prices and bond yields provides some breathing room for the markets.

Asia

Trading in Asia is running in a mixed trend this morning. The Nikkei 225 index in Japan falls by 0.25%, the Kospi in South Korea loses 0.3%, the Hang Seng in Hong Kong and Shanghai in China rise by about 0.5%.

Alibaba’s stock stands out, rising by about 3% in Hong Kong, after senior management at the Chinese technology company purchased shares of the company.

Wall Street

The contracts on Wall Street this morning are trading with only small changes.

As mentioned, the market is eagerly awaiting Nvidia’s report after the lockdown. “A good report will not necessarily be enough – investors are looking for a significant positive surprise. The market is trying to understand whether it can continue to grow at the current exceptional rate,” said Uzi Levy, director of securities research at Mizrachi Tefahot.

Before that, the inflation data in the US will be published. The PCE for July, the Fed’s preferred inflation measure, will be released this afternoon. The expectation is A monthly increase of 0.1% and annual inflation of 3.6%, a small decrease compared to June. The figure is released when the bond market is in focus. Government bond yields in the US climbed to multi-year highs last week. Yesterday there was a decrease in yields.

On Friday, Fed Chairman Kevin Warsh will arrive in Jackson Hole, as the markets seek an answer: will the Fed continue to fight inflation even at the cost of higher yields – or will it begin to ease the pressure on the debt market.

Yesterday Wall Street interrupted the streak of declines. The Dow Jones rose 0.2%. S&P 500 by 0.3%, while Nasdaq by 0.5% with chip stocks leading the gains.

The currency and commodity market

Gold reacts to the erosion of the dollar and has already recorded a jump of 16% since the beginning of the month. “The move was supported by weaker economic data in the US in July, along with a re-examination of the Fed’s credibility and increasing activism by the US Treasury Department in the markets,” writes the Swiss wealth management bank Pickett.

Under the radar, another record-breaking metal is copper. The reason: the threat of US tariffs continues to draw large quantities of the metal into US warehouses, turning a global surplus into a shortage in markets outside the US.

Tel Aviv

The investors in Tel Aviv hope to continue yesterday’s positive trend this morning. Another reason for optimism is yesterday’s increases on Wall Street.

The dual shares are not expected to change much this morning – Palo Alto will be down 2% at the opening of trading. The company will report its quarterly report next Tuesday and JP Morgan expects it to present strong results and raised the target price to $384 for December 2027 – reflecting an upside of about 10%. Teva, Tower, Camtech and ICL with positive gaps of about 1%.

Yesterday, led by the insurance stocks that presented excellent quarterly results, the stock market ended with slight gains – the Tel Aviv 35 index climbed about 0.4%, while the Tel Aviv 90 index added about 0.7% to its value.

Another thing you should know

According to UBS, the Fed’s interest rate decision in September and the mid-term elections in November are two risk points that are getting stronger and stronger – this is how the “UBS Market Fragility Index” reveals, which has reached the maximum possible level, for the first time in two years, and signals that the stock market is becoming more vulnerable ahead of the Federal Reserve’s interest rate decision in September and the US mid-term elections in November.

The index, known as Turbu-lens, reached a level of 1 on August 19, the highest possible score. The index is based, among other things, on volatility in the G10 currencies, CDS contracts of low-rated companies and positions in the S&P 500 futures market.

The signal is validated by another dimension, the VIX, or as it is called the fear index. Bloomberg notes that VIX contracts for expiration in September are trading around 17.4 points, but the price is rising in contracts for October 19 and November 19.7 – a sign that traders are willing to pay more for protection against volatility during the election period.

The last time the UBS index reached its maximum level was ahead of the Fed meeting in December 2024. The VIX then rose 12 points, before jumping about 25 points in March 2025.

The historical data is not encouraging: since 1945, market volatility has been higher in midterm election years 80% of the time, with an average increase of 3.5 points. In the years when the same party controlled the White House and Congress, the average increase was 6 points.