Mixed trend in Asia; The stock market in Seoul jumps by about 1.5%

Trade review: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations

08:11

This morning in Asia, the main indexes are trading by the hour in a mixed trend. The Nikkei fell by 0.4%, the Shanghai Stock Exchange rose by 0.8%, the Hang Seng jumped by 1% and the Kospi added 1.3% to its value.

Futures in the US are trading higher this morning.

Last night (Tuesday) on Wall Street, trading closed down – NASDAQ shed 0.4%, S&P 500 fell 0.5%, Dow Jones fell 0.7% and completed nine consecutive days of declines, the longest streak since 1978. The declines Last night they were on the background of the interest rate decision today (Wednesday) in the USA, the interest rate will probably decrease by 0.25% and will complete a 1% decrease since September, but the market fears that the rate of interest rate cuts will decrease next year. extension down.

She is the one who has been recording a correction for a while Nvidia which decreased last night by more than 1% and completed a decrease of about 14% since the record set in early November, $148.8 per share. The company’s market value has since dropped by about half a trillion dollars. After trading at an all-time high in November and even being the largest company in the world by market value, the stock began to fall following statements by Microsoft andGoogle who have indicated that their spending on artificial intelligence will grow at a slower rate in the future.

Rumors of overheating in its new Blackwell model servers increased fears of further delays in increasing production, and sent the stock further down. Even the company’s latest and impressive quarterly report, which exceeded the high expectations, failed to improve the direction of the stock.

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solaredge It jumped about 17% last night after falling 7.7% on Monday. Analysts fromGoldman Sachs Yesterday they upgraded the stock from a “sell” rating to a “buy” rating, and raised the target price from $10 to $19. At Goldman, investors’ concerns about the company’s ability to deal with a debt of 350 million dollars in 2025 seem “exaggerated”.

Also a share nano dimension The Israeli one jumped by about 17%. Last night (Tuesday) it was announced about a shakeup in the company’s board of directors: all six of the veteran board members resigned immediately, including the chairman Dr. Yoav Nissen-Cohen and the former commander of the Air Force Eitan Ben-Eliyahu. At the same time, following a court ruling in Israel, two new directors were immediately appointed, who previously served as observers – Dr. Yehoshua Rosenzweig and Kenneth Traub. It seems that the market welcomes the changes.

In the American debt market, the yield on the 10-year government bond traded unchanged at 4.39%. Likewise, the yield on the two-year bond, which was more sensitive to changes in short-term interest rates, was 4.25%.

In the commodity market, cocoa prices have completed an increase of more than 180% since the beginning of the year and are breaking a new record – 11,938 dollars per ton. The main reason: renewed fears of bad weather conditions and a lack of supplies in West Africa, where about three quarters of the world’s cocoa production is concentrated. The jump in prices is also due to the fact that the global cocoa market recorded the largest deficit in more than 60 years. Economists attribute the shortage to crop failures in Ivory Coast and Ghana, the world’s largest cocoa producers.

“While forecasts for the 2024/25 marketing year look better, there is still concern about weather developments in West Africa and their implications for output this season,” wrote the Dutch international bank ING. “Current forecasts show that output in West Africa – which accounts for more than 70% of global output – will rise slightly. However, there are risks to this due to the recent severe weather,” they added.

Bitcoin hit another high today and surged above $108,000 per coin, but retreated towards the close and traded at $106,800.

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Oil prices fell by about 1% – American oil fell to $70.2 per barrel and Brent oil to $73.3 per barrel.

In the macro sector, today at 21:00 Israel time, the governor of the US central bank, Jerome Powell, is expected to lower the interest rate for the third and last time this year. The expectation is for a reduction of 25 basis points, so that the interest rate will be 4.5% at the upper limit. Bank of America estimates that after that the Fed will pause its reductions and will not make another cut in January.

In addition, the bank’s economists point out that alongside the interest rate announcement, the economic forecast for 2024 is expected to be updated upwards, in accordance with the latest economic data. Growth is expected to be higher, inflation higher and the unemployment rate lower. Accordingly, they lower the expected rate cuts in 2025 to three.

The US central bank will join the ranks of central banks that have cut interest rates in recent weeks: the central bank in the Eurozone has reduced interest rates for the fourth time this year by 0.25% to 3%, the Canadian central bank has reduced interest rates for the fifth time this year by 0.25% to the level of 3.25%, and the Swiss central bank reduced the interest rate to 0.5%, the largest reduction it has made in about a decade.

Julius Baer economists note in their review that they are optimistic about US stocks, especially about the S&P 500: “The S&P 500 has achieved an impressive total return of 28.5% since the beginning of the year, while maintaining unusually low volatility in the stock market. This excellent performance can be attributed to a positive macroeconomic environment, which includes strong economic data, the start of the interest rate reduction cycle by the Fed, and the increase in uncertainty related to the elections. Historical trends indicate that stock market volatility tends to reflect economic uncertainty over long periods.

“Following a decline in economic uncertainty, the S&P 500’s realized volatility over the past 12 months has declined significantly, from a peak of 22.5% nearly two years ago to a current reading of 12.3%. This unique combination of strong returns and moderate volatility has led to a high yield ratio A risk-adjusted 2.3 for the S&P 500 which places it in the 94th percentile of annual risk-adjusted returns since 1990. Similarly, other U.S. stock indexes have also reported higher year-to-date risk-adjusted returns relative to their historical norms.

“Looking ahead, the top consensus expects the S&P 500 to reach 6,500 by the end of 2025 (our forecast is 6,450), indicating a 7.4% gain next year. Calculating the expected return by dividing it by the options-led volatility on the front 12 months indicates an expected risk-adjusted return of 0.5, which indicates on slightly more optimistic expectations compared to last year. In light of this, and calculating our forecast for earnings growth of 10% (compared to 12.1% in the consensus), which is driven by the expansion of the market breadth, we remain optimistic about US stocks, especially about the S&P 500.”