Slight declines on Wall Street; Powell: Afraid to lower interest rates too early

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

17:30

Slight declines on Wall Street after Powell’s speech at the central bank conference, which is taking place in Portugal. The Dow Jones is down 0.1% and the Nasdaq and S&P 500 are trading close to the base rate.

A new US study by CCData claims that the Bitcoin currency has not ended its current streak of gains and that the cryptocurrency is expected to soar this year to an all-time high.

Last March, Bitcoin reached a peak of $73,000 per coin, but since then it has fluctuated between $59,000 and $72,000. The sequence of increases discussed in the study is part of the crypto’s “life cycle” – in which it reaches a new peak before falling to a low, known as the “crypto winter”.

Since the launch of the digital currency, it has experienced three “cycles of life”, which followed similar patterns. And looking at the same historical data, CCData says that from the event of the coin crossing to the peak of the increases, between 366 and 548 days pass.

16:50

The Chairman of the Federal Reserve, Jerome Powell today (Tuesday) expressed satisfaction with the rate of interest in the US over the past year. However, Powell qualified his words, saying that he wants to see more tapering before he feels confident enough to start cutting interest rates.

Powell said these things at the conference of central banks, which is taking place in Portugal.

Despite Powell’s optimistic statement, he also said he was concerned about cutting interest rates too early, which could hamper the progress of falling prices, which two days ago reached a peak not seen since the 1980s. “I am aware that if we act too soon, we will undo everything we have done so far, but if we act too late we will hurt the economic recovery,” Powell said.

16:30

Trading on Wall Street opened with falling rates. The Dow Jones index weakened by 0.1%, the Nasdaq and the S&P 500 decreased by 0.2%.

Tesla announced that in the second quarter of 2024 it delivered 443,956 cars. While this is a 4.8% decrease in the number of deliveries compared to last year, the car company beat analysts’ forecasts, which stood at 439 thousand vehicles. stock Tesla Now up 4.5%.

In the European stock markets, the declines continue, the French CAC index and the British FTSE index decrease by 0.5%, and the German DAX index loses about 1%.

15:15

The declines in Europe are intensifying now – DAX is down 1.3%, and POTSI is down 0.6%, the French CAC index is down 1.1% after it rose 1% yesterday due to the election results in the country.

On Wall Street, futures indicate declines – Nasdaq down 0.6%, Dow Jones down 0.3% and S&P 500 down 0.4%.

You discovered satellite networks announces today that DataPath, its wholly owned subsidiary in the USA, has received orders in the amount of more than 9 million dollars for In Field Services technical support for satellite communication networks of the US Department of Defense and other foreign security agencies.

14:14

Trading in Europe is conducted with price drops – Dax falls by 0.9%, and POTSI by 0.3%, the French CAC index falls by 0.9% after yesterday it rose by 1% in view of the election results in the country.

César Perez-Ruiz, chief investment officer at Swiss wealth management bank Pickett notes in his review that “in the shortened US trading week due to the 4th of July celebrations, markets will be watching if the ISM manufacturing and services data confirms June’s strong PMI. Employment data will also be a key indicator of the health of the American consumer. Weak results of consumer companies last week reinforce our theme of shifting focus from consumers to producers.”

“In politics, the possibility of Biden giving way to an alternative candidate should be taken seriously. In France, we expect the fiscal risk premium to remain structurally higher for a longer time with (geo)political risk high but mostly unpriced, we become more cautious about stocks.”

12:23

stock atm Soars in trading in London. The technology company signed an agreement for strategic cooperation with a leading global organization in the fields of technology, engineering and security to supply the group’s advanced cyber solution to commercial markets. The partner generated revenues of over $10 billion in 2023 and serves clients in over 100 countries, with operations spanning across Asia, Europe, the Middle East and the US.

As part of this agreement, Batam will adapt its advanced encryption platform to the partner’s requirements, with the development being financed by the partner. The customized platform will be distributed globally by the partner, with exclusivity in certain regions, to a variety of commercial markets, as well as to essential national infrastructures. This agreement, and the launch of the cyber solution for the commercial markets, significantly expands the potential of the market that the group addresses, whose cyber solution is well positioned to penetrate, thanks to the significant distribution network of the partner and its commercial deployment.

11:41

The price of oil is already approaching a two-month high, the reasons are the escalation in our region and the concern about the beginning of the hurricane period in the Atlantic Ocean. Brent oil traded at $87 and American oil at $83 per barrel.

Hurricane Beryl strengthened to category 5, the highest level at this time of the year.

11:03

The Antitrust Commissioner in France, who is considered an activist especially against American companies, may accuse the American artificial intelligence chip giant Nvidia of behavior designed to harm competition – as Reuters has published in recent hours. Investors, however, are not impressed: the stock is down in early trading on the Nasdaq by only 0.3%.

As far as is known, this is the first antitrust investigation against Nvidia, which dominates the hardware and software market in the field of artificial intelligence model training and operation, and is now expanding into the worlds of software and the cloud.

10:44

Trading in Europe is conducted with rate drops – DAX drops by 0.6 and POTSI by 0.7%, the French CAC index drops by 0.9% after rising by 1% yesterday due to the results of the country’s elections.

08:42

In France, the CAC index jumped by 1% yesterday following the election results models published on Sunday in France according to which about 34% of the French voted for the bloc led by Marine Le Pen’s “National Union” party.

Trading in Asia this morning follows a mixed trend – the Nikkei index rises by 1%, the Shanghai index trades unchanged, the Hang Seng rises by 0.8%, the South Korean Kospi index adds 0.8% and in India the Nifty index rises by 0.5%.

The futures on Wall Street indicate slight declines this morning – Nasdaq is down 0.4%, Dow Jones and S&P 500 are down about 0.2%.

Yesterday on Wall Street trading closed with price increases – the NASDAQ index rose by 0.6%, the Dow Jones index closed almost unchanged and the S&P 500 index rose by 0.1%.

stock Tesla Jumped about 5.6% after announcements that it is expected to meet the sales target for the second quarter, which are expected to be published this week. The change for the better puts Tesla on track for a 5-day bullish streak, the longest since July 2023. Despite the recent bullish streak, the stock is still considered the weakest of Wall Street’s Magnificent 7, down 15% since the start of 2024.

Two Israeli women made headlines yesterday – similrv Acquires a company from Switzerland, 42matters. The amount of the purchase was not disclosed. The acquired company provides data and analysis on the world of applications. Similrave is trading at a market value of 611 million dollars after a 46% increase in the stock in the first half.

The Israeli Autotech company Locust Robotics Jumped by about 6% after reaching a milestone in its business activity: the company was chosen by a large car manufacturer (whose name was not reported) to develop radar systems for serial production.

Arba Robotics recently issued convertible bonds in the local stock exchange in the amount of 113 million shekels, and in order for the money to be transferred to the company, two conditions were set: winning the tender to supply its products as the sole chip supplier for radar imaging to one of the ten largest car manufacturers and the average of the closing prices of its stock on Nasdaq for 30 consecutive trading days will not be less than 3.1 dollars and the trading turnover will not be less than 100 thousand shares per day. The conditions must be fulfilled by the end of March 2025. As of today, the share price on Nasdaq is 1.91 dollars and the market value of Arba reaches 154 million dollars. The report is a significant part towards meeting the first condition.

● It won’t go on like this: JP Morgan’s gloomy outlook for Wall Street stocks

The US debt market saw sharp increases yesterday. The yield on the 10-year US government bond jumped by 14 basis points to 4.48%, and the yield on the two-year notes increased by 5 points to 4.77%.

The Japanese yen reached a new low against the dollar this morning – 161.7 yen to one dollar.

Caspar Koechli, economist at Julius Baer attributes the strength of the euro to the reaction to the results of the French elections, “Yesterday’s elections in France, which were characterized by the highest turnout in the first round since 1997, shook the existing majority structure in the French Parliament.”

“The bond and euro markets reacted negatively to the announcement of the snap election, but debt sustainability should not be an immediate problem given that the French government is currently paying low interest rates on its outstanding debt. The results of the first round reduced the chance of an absolute majority of the right or the left, and further reduced the risks of implementing spending-driven fiscal policy changes. Accordingly, the euro has strengthened in response, moving back towards our target of $1.08/euro, offsetting some of the downside associated with election risks, the rate now stands at $1.072/euro.

Looking at the week ahead, although the Wall Street trading week will be shortened, a host of data or events will affect the market.

The most important figure will only be published on Friday – as on the first Friday of every month, the monthly unemployment figures will be published in the US, which will shed additional light on the timing of the interest rate cut. The expectation is for an addition of 182 thousand jobs, much less than the previous month – 272 thousand jobs.

Fed Chairman Jerome Powell will speak this week at the central bank conference he will hold in Portugal, on Wednesday the minutes of the Fed’s interest rate meeting held two weeks ago will be published.

After the confrontation between Trump and Biden that ended in a clear victory for Trump, Wall Street analysts analyzed the US bond market in case Donald Trump wins the November election. Bloomberg pointed out that some of them even recommend to their clients to take into account sticky and high inflation in their investment portfolio and that the government bond yields will be higher.

In fact, this is already happening, notes Bloomberg – government bonds fell on Monday and pushed yields to their highest level in about 10 days, and they rose even more after the court determined that the accusations against Trump that he tried to tilt the election results in November should be limited to at least -2020. The increase in yields was recorded mainly in the long-term bonds, that of the 30 increased the most to 4.65%, the highest level since the end of May.

At Morgan Stanley, analysts Matthew Hombach and Gunit Dingra published in a letter to investors that “now is the time” to bet that long-term interest rates will rise relative to short-term interest rates.

“The increase in Trump’s chances since the confrontation last Thursday means that investors must come to terms with an economic policy that will lead to more interest rate cuts and therefore to a decrease in short-term bond yields, to fiscal expansion (increasing the budget) and to an increase in inflation and therefore to pressure for increases in long-term bond yields,” said Morgan Stanley .

Barclays says that the response to the improvement in Trump’s chances is to hedge against inflation. Strategists Michael Pond and Jonathan Hill wrote on Friday that “it is advisable to purchase index-linked five-year bonds, these will have excess yields over the regular government bonds.”

But not everyone thinks that the increase in long-term yields and therefore an increase in the slope of the yield curve are inevitable. “While the consensus says that there will be a general sell-off of bonds in the event of a Republican victory, we actually see the possibility of a decrease in risk,” Goldman Sachs strategist William Marshall wrote following the confrontation.

Goldman Sachs believes that the focus will shift from fiscal expansion (increasing the budget) to an increase in global freight rates, which will affect productivity and growth.

But there are also those who recommend not rushing to draw conclusions – “It’s really hard to know,” says Kathy Guns, director of the bond department at Charles Schwab, “because the mix of Congress is unclear, and assumptions about the impact of Trump’s economic policies are not well-founded right now,” she said , “It’s just too early to make assumptions, presidential candidates say a lot of things during the campaign, but then they have to convey their thoughts through Congress.”