Declines in Asia; Yen strengthens, Nikkei falls 1%

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

09:10

This morning in Asia, rates drop – the strengthening of the Japanese yen causes the closing of additional carry trade positions and the sale of shares. In addition, the quarterly report of the e-commerce giant JD.com Drops the share price by 10% and clouds the Chinese stocks. Meanwhile it was announced that Walmart the largest shareholder in the company, is about to sell her share in it. The Nikkei index falls by 0.8%, the Shanghai index by 0.2%, and the Hang Seng index falls by 0.7%, Kospi by 0.2%.

Wall Street futures are up by 0.2% this morning. Markets are on alert for Friday when Powell will speak at the Governors’ Conference in Jackson Hole. Investors will be looking for clues as to what to expect at the central bank’s policy meeting in September. Yesterday, the president of the Fed in Minneapolis, Neil Kashkari, hinted at the possibility of an interest rate cut at the next central bank meeting, due to the fear of an excessive weakening of the labor market.

Yesterday, after eight consecutive days of gains, the longest streak this year, trading on Wall Street closed with small decreases. The Nasdaq was down 0.3%, the S&P 500 and the Dow Jones were down 0.2%. The Russell 2000, the small-cap index, was down 1%.

Palo Alto jumped 8% and was the standout among S&P 500 stocks, The cyber company reported the second quarter reports last night in which it exceeded analysts’ expectations in both profit and revenue.

News toTesla : The European Union is about to lower the purchase tax on Tesla vehicles produced in China, from a rate of 20.8% to 9%. In addition, according to a report in China, Tesla’s new factory in Shanghai is about 45% complete, the factory may generate annual revenues of 10 billion dollars. On the less positive side, presidential candidate Donald Trump has said he may eliminate the $7,500 tax credit for purchasing an electric vehicle.

Trump Media It went down again yesterday and by 3%. The stock of Donald Trump’s media company shed 40% of its value in the last month. The question arises, will Trump exercise his shares in the media company? Bloomberg noted that Trump will soon be able to sell his stake in the company, about $2.6 billion. Trump has not specifically indicated his intention to do so.

Bloomberg notes that on September 20 the blocking period will end and he will have the option to sell his shares. Since it was issued, the company’s stock has experienced great volatility, it was already trading at a price of 79 dollars per share and recently dropped to 22 dollars and a value of 4.3 billion dollars. Selling it will cause another dive in the share price.

Trump needs a lot of money to cover the costs of the indictments pending against him. Trump was sued, among other things, for his alleged attempt to bias the results of the 2020 elections, he was also convicted of falsifying corporate documents when he paid porn star Stormy Daniels about 8 years ago as a hush fee for their relationship.

According to Bloomberg, the exact date Trump can sell his shares depends on the stock price. As long as the share price is above $12 on all trading days starting from August 22, then the first date he can sell will be September 20, if not, the date will be postponed to September 26. All of this will happen a few days after he hears his sentence in the Stormy Daniels case, on September 18.

stock Bank of America decreased by 2% afterBerkshire Hathaway managed by Warren Buffett sold more of its shares. The company sold 14 million shares worth $550 million and was left with a 12% stake in the bank, according to Dow Jones data. Berkshire began selling the bank’s shares, one of its largest holdings, in July.

stock Netflix Traded during trading at an all-time high and at $710 per share, at its previous peak in 2021 it traded at $701. The stock rose to $699. The company announced yesterday that advertising revenues will jump 150% this year compared to last year.

In the American debt market, the government bond yield fell by 5 basis points to 3.81%. In their review, Leader Capital Markets noted that “the bond market in the US is still pricing in an overly aggressive interest rate cut.”

Oil prices further decreased yesterday by about 0.5%, American oil traded at $74 per barrel and Brent oil at $77.2. Bank of America predicts another drop in oil prices, “The oil market faces a potential oversupply, but geopolitical, economic factors and relatively low energy prices may moderate the drop in prices. However, the risk of a world trade war poses a significant threat to the forecast. The increase in supply Oil (outside of OPEC+) and the slowdown in demand due to the rise of electric vehicles create an expected oversupply.”

Regarding the US interest rate outline, Ofer Klein, head of the economics and research division at Harel: “We believe that the markets in the US this year are pricing in a too fast interest rate cut path, something that we estimate the American governor will emphasize in his speech on Friday.”

“Inflation in the US continued to decline consistently and slowly and stood at 2.9% in July, the lowest since 2021. We expect that at the beginning of 2025 it will reach the target of 2%. Core inflation also continued to moderate, after a moderation in the prices of transportation services, vehicles and rentals was recorded in recent months.”

“Moderation of growth and inflation strengthen our estimates that the central bank will reduce the interest rate in about a month. At the same time, we believe that we will not see a reduction greater than a quarter of a percentage point, something that we estimate the governor will emphasize in his speech on Friday at the bank’s annual conference in Jackson Hole”