Trade review: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
15:35
The PCE index (the Fed’s preferred price index) for the month of May fell to an annual rate of 2.6% – in line with market expectations. This is its lowest level in the last three years. Last month the index stood at 2.7%.
The index indicates a continued gradual moderation in inflation, but not at a level that would allow the Fed to cut interest rates soon. Most of the forecasts estimate that the Fed will initiate monetary easing between the September interest rate decision and the November decision – close to the time of the US elections or right after it.
“According to the consensus, the PCE price index remained unchanged. The moderate monthly figure is not surprising, especially considering the price index published by the BLS about two weeks ago, which also indicated price stability. The lack of monthly change in prices also helps moderate inflation Annual to 2.6%,” wrote Yoni Fanning, chief strategist at Mizrahi Tefahot.
“Monthly inflation of 0 hasn’t been seen in PCE since November of last year. As with the last CPI, a lot of that was actually due to the correction in gas prices. But core PCE inflation was also up just 0.1% this month. We haven’t seen that since either November. And even then, it was to a large extent aided by the drop in oil prices around that time. In contrast, the 0.7% increase in medical insurance prices during May alone is a striking example of the price adjustments that still need to be made in the American economy The relatively constant and high contribution of rental prices, it is not surprising that we continue to see relatively high levels of inflation, in one way or another.
“In June ’23, the monthly increase in PCE stood at 0.2%, and in July it was already reduced to only 0.1%. It is hard for us to believe that the figures for June and July ’24 will both restore the achievement. Technically, this means that annual inflation will rise slightly, at least In the next two months, annual inflation of 2% is the Fed’s official target for price stability in the country. Despite the narrow distance from the target of the figure today, and taking into account the aforementioned, we will probably continue to be close to the target, but not at the target.
“Market expectations for the Fed’s interest rate cut in the upcoming announcement, at the end of July, were never particularly high. In our estimation, the current pricing, which stands at about 10%, focuses more on the possibility of an extreme scenario, than a ‘business as usual’ situation, in which the Fed suddenly decides that every It’s time to start lowering interest rates. This leaves the decision in September as the money time. The market continues to price a relatively high probability of a first interest rate cut there.
“Meanwhile, with us, the cloud of war continues to hover over the local economy. And more than it results in actual damage to activity, fears of escalation are a more significant factor in terms of market parameters. The dollar exchange rate is of course the most prominent example of this matter. And at current levels, PCE or no PCE, it is difficult We should see the Bank of Israel lower interest rates in a week and a half. The announcement after that will be received at the end of August, in our estimation there will be a local interest rate reduction.”
14:30
The mixed trend in European stock markets continues. The Dax index rises by 0.6%, and the Potsi index rises at a similar level. while the French CAC is now down 0.3%.
In the morning, the consumer price index was published in several European countries. In France, inflation slowed slightly in June. In Spain, too, inflation is starting to fall. According to the published data, it decreased in June to an annual rate of 3.5%, compared to 3.8% in May.
In Italy, on the other hand, inflation continued to rise slightly, by 0.8% compared to the corresponding period last year.
13:00
The Japanese holding company Softbank announced today its intention to raise a debt of about 900 million dollars, and about 900 million euros, the total amount raised by the company is expected to be 1.86 billion dollars. The annual yield on the bonds to be issued by the company will be 5.4-7%.
According to the company, the purpose of raising the debt is twofold, to cover the existing debt, and to invest in the development of artificial intelligence. After the announcement, the company’s shares jumped by about 2.5%.
In France, a few days before the government elections, the polls predict a victory for Marine Le Pen’s far-right party. The CAC, the main index on the French stock exchange, is now losing 0.3% of its value, with a 3% drop in the stock L’Oreal inheritance of 1.2% bHermes and a decrease of 0.4% inLouis Vuitton .
In the US, the contracts on the main indices on Wall Street are green, with the market waiting for the inflation data to be published at the end of the month.
The Fed’s preferred inflation index, the PCE, is expected to remain unchanged in May relative to April, and reach an annual rate of 2.6%, according to CNBC.
stock Nike Falling 14% in early trading after the company cut its second forecast. Then the sports footwear company Potlocker It also lost 5%.
11:00
European stock markets are now trading in a mixed trend, the DAX index rises by 0.3%, the FTSE rises by 0.4%, while the declines in the French CAC strengthen to 0.5%.
In the currency market, in Japan, the yen reaches another low against the dollar. The yen currency now stands at 160.9, after in the morning it even crossed the 161 level, for the first time since 1986.
Last Wednesday, the Japanese currency stood at 160.82 – a 38-year low against the dollar. The slump raised speculation that the central bank might intervene again in the Japanese currency market.
10:15
A mostly green opening in European stock markets. The DAX index rises by 0.4%, the FTSE rises by 0.5%, while the French CAC trades down 0.1%. The European general Stoxx 50 index rises by 0.3%.
In France, the stock of the makeup company L’Oreal Drops by 2%, the Louis Vuitton share weakens by 0.5%, and the Hermes share loses 0.6%.
The main indexes in Asia closed higher. The Nikkei added 0.6%, the Shanghai Stock Exchange jumped 0.7%, and the Kospi rose 0.5%.
The Hang Seng climbs about 0.4%
8:10
This morning in Asia, the main indexes are trading higher. The Nikkei adds 0.6%, the Hang Seng climbs by about 0.4%, the Shanghai Stock Exchange jumps by 1%, and the Kospi index rises by 0.3%.
In the US, the futures contracts are trading slightly higher this morning, the Nasdaq contracts are up 0.3%.
Trading on Wall Street closed last night with slight gains. Nasdaq added 0.3%, Dow Jones and S&P 500 rose 0.1%.
Chip stocks were dragged down today following the disappointing report of Micron Technology which fell by about 6%, Nvidia also fell by about 2%.
In the American debt market, bond yields are rising slightly. The yield on the 2-year bond is up one point to 4.72%, and the yield on the 10-year bond adds 2 points and is trading at 4.31
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