Slight increases in Europe; The Tokyo Stock Exchange is at a peak following the elections

12:20

At the Jefferies investment bank, they estimate that AI fears are exaggerated in the context of the negative impact on software stocks. According to them, the transition to AI is more disruptive than the transition to the cloud, but there are players who will become winners in the long run.

Jefferies notes their preferred choices in various segments, including the Israeli fintech company Global-E (among the small-medium stocks) and the Palo Alto cyber security company that is acquiring Cyberark. Among the giants, they recommend Microsoft, Meta and Amazon.

10:49

stock Plus 500 Rising with the opening of trading on the stock exchange to a new high after the Israeli fintech company published results for 2025 (which were partially published in the past) and estimated that in 2026 it will present results higher than market expectations.

The market now expects annual revenues of approximately 750 million dollars, which the company expects to surpass.

10:22

In line with the global trend, trading in Europe also opened with green screens – the Frankfurt Stock Exchange rose by 0.7%, Paris and London by 0.3%.

06:27

The stock market in Japan soars to new highs after Prime Minister Sana Takaichi won a historic election victory. The Nikkei index climbs by more than 4% and the Japanese Topix jumps by more than 3% also to a record. Increases are recorded in other exchanges in the East.

● The index that starred on Wall Street, and the report that will determine the direction of interest rates in the US
● The “grandfather” of Wall Street beats the tech kids: what’s driving the Dow Jones

Sana Takaichi, who in October became the first woman to be appointed Prime Minister in Japan, and who is also known as the “Iron Woman of Japan”, used her popularity to announce snap elections to consolidate her power in the parliament at a time when Japan is dealing with the weakness of the local currency, ongoing inflation and tensions with China.

The South Korean stock market also jumps by more than 4%, in Shanghai and India there are increases of up to 1%, and in Hong Kong increases of 1.5%.

On Wall Street, a green opening is expected, although much more moderate after a particularly volatile week and sales in the technology sector. The leading indexes rise by 0.1% according to the futures contracts.

Today, Wall Street will try to continue the dramatic reversal of Friday, in which the Dow Jones index crossed the 50,000 point mark for the first time, while a daily rally of about 2% in the S&P 500 and Nasdaq indexes erased some of the pressure that had accumulated earlier in the week.

However, despite Friday’s sharp gains, the Nasdaq ended a fourth straight week of declines with a fall of nearly 3% amid growing concerns about the impact of artificial intelligence on software companies. The S&P 500 has recorded a decline in three of the last four weeks, with the Dow and the S&P 500 still in positive territory since the beginning of the year, but the Nasdaq this week lost all gains since the beginning of 2026.

Despite the strong rally on Friday, sentiment in the technology market remains tense: the Hasselt Fund for Software Shares (IGV) ended the week with a cumulative decline of 8.7%, completing a 23% fall since the beginning of the year. Nvidia ended the week with an increase of about 8%, but the cloud giants Amazon, Google and Meta fell on the last trading day, against the background of commitments for investments of about 650 billion dollars in AI by the big companies – which sharpens the feeling of investors that the effect of AI on the markets is accompanied by high uncertainty.

In a few months, the new Fed chairman, Kevin Warsh, will take office and Barclays Bank notes that historically, the entry of a new Fed chairman is a “red” period for stocks. Warsh is seen as likely to reduce the balance sheet (less cash in the market), which creates pressure in the short term, even though he supports lower interest rates.

Since 1930, the S&P 500 index has recorded average declines of 5%, 12% and 16% in periods of one month, three months and six months after a new chairman took office. This is according to data compiled by Alexander Altman of Barclays. These falls were sharper than the average decline of the index in any other random year.

“While the market may be concerned about whether or not Mr. Warsh is perceived as a ‘hawk’ (supporting high interest rates), the real test is expected to come after May,” Altman wrote. “The stock markets tend to ‘test’ new chairmen to a certain extent during the first six months of their tenure.”

Although Morush had a reputation as a “hawk” during his previous tenure at the central bank, he has since moved closer to the positions of the president and publicly argued for lower interest rates. He also stated that the Fed should reduce its bond portfolio and recalculate its economic models.

The change of leadership adds to the already considerable uncertainty regarding the interest rate path, which ranges between high inflation and periodic signs of cooling in the labor market. CIBC notes that a push to reduce the Fed’s balance sheet – a move that will draw liquidity from the financial system – could have a negative impact on risk assets.

On the other hand, Morgan Stanley estimates that Warsh’s reputation as someone interested in reducing the balance sheet may actually help cool gold prices and support the dollar, which will give the administration “time to organize” on its broader policy goals.

Warsh is considered to believe that the Fed’s balance sheet has become too monstrous and that it is distorting the market. If he decides to reduce it faster than planned, it may create selling pressure on shares, because investors will feel that the financial “oxygen” in the system is diminishing.

In the corporate sector, Coca-Cola, McDonald’s, Cisco and ON Semiconductor, among others, are expected to publish reports.

In the US bond market, investors are worried about the increase in the steepness of the yield curve. The closely watched index in the US bond market is approaching its highest level in over four years.

A “steepening” yield curve means that the gap between the short-term interest rate and the long-term interest rate is increasing. This is happening now for two opposite reasons: on the one hand, weak employment data makes investors bet on an interest rate cut soon (which lowers short-term yields). On the other hand, the huge deficit of the US government and its replica spending make investors fear and attach a “penalty” of higher interest rates for the long term. For an investor, this is a classic signal of a transition from a “hot” economy to fears of a recession, and this usually bodes well for bank stocks (which profit from the gap) but is a warning sign regarding the stability of government debt.

The excess yield that investors require to hold 10-year bonds, compared to their two-year equivalents, reached 73.7 basis points this week – within touching distance of the 2022 record recorded in April. Strategists and investors estimate that the general direction is a further widening of the gap.

“The yield curve should be steeper,” said Anshul Pradhan, head of U.S. interest rate strategy at Barclays, noting that he expects the gap between the 3-year and 30-year yields to widen. “The markets need to price in more interest rate cuts than they are currently pricing in.”

Bitcoin traded stably this morning (about $71,000 thousand per currency) after jumping up to 13% on Friday and reaching a price of $71,469. Earlier on Friday, the coin nearly fell below the $60,000 mark for the first time since October 2024. Despite the surge, the coin is still down more than 15% for the week, after trading above $84,000 last Friday.

The crypto market has been experiencing instability since a brutal series of sell-offs last October that damaged market confidence. The wave of sales gained momentum this week, at the same time as the elimination of leveraged bets and a wider upheaval in the markets.

“The fact that bitcoin bounced back from the $60,000 level suggests that there is strong support there,” said Damian Lu, chief investment officer at Ericsson Capital. However, he added that traders should “not expect a sharp rally to the upside” as market sentiment remains cautious.

Among those who feel the pressure are also the big bitcoin “hoarders”. In its Thursday earnings report, Michael Saylor’s strategy firm confirmed a net loss of $12.4 billion for the fourth quarter, due to the mark-to-market decline in its vast bitcoin holdings. Despite this, the company’s stock surged 26% on Friday following Bitcoin’s recovery.

“It is always difficult for Bitcoin to function as a store of value in such market conditions,” said Fabian Dori, Chief Investment Officer at Signum Bank. “But it is important to remember that Bitcoin is not a short-term store of value or a hedge against momentary market volatility.”

Julius Baer are convinced that it will take time for the dust from the current move to settle. “Volatility is expected to remain high at least in the short term, and an immediate renewal of the previous sharp rise to the peak seems less and less likely to us. That is why we continue to adhere to our neutral assessment regarding silver, and also continue to hold a long position in the gold/silver ratio, despite the recent sharp rise in it.”

In the coming week, investors will focus on the main US macro data: on Wednesday, the employment report for the month of January will be published belatedly, when economists estimate an addition of about 70 thousand jobs and a stable unemployment rate of 4.4%.

The weakness in the American labor market was the main catalyst for the three consecutive interest rate reductions carried out by the Fed at the end of 2025. Following the weak data, the probability priced in the markets for an interest rate cut in March rose from about 10% at the beginning of last week to about 23%.

On Friday, the Consumer Price Index (CPI) will be published, which is expected to indicate a monthly increase of 0.3% and an annual inflation of 2.5%.