Rises on Wall Street; Tesla rises by 6%, Verint falls by 14%

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

17:37

Trading on Wall Street is currently in a mixed trend. The Nasdaq is up 1%, the S&P 500 is up 0.3% and the Dow Jones is down 0.1%.

CS.ai is falling in trading, after the startup that develops an artificial intelligence application platform for large organizations reported in its quarterly report a sharp drop in subscription revenues. The company brought in 73 million dollars compared to an expectation of 79 million dollars.

There is little demand in the American bond market. The yield on ten-year bonds drops slightly to 3.75% – its lowest level in a year. The yield on two-year bonds – which is considered more sensitive to changes in short-term interest rates – is trading stable at 3.78%, its lowest level since May 2023.

17:02

After two days of declines, trading on Wall Street is now in a mixed trend. Nasdaq rises 1%, S&P 500 0.3% and Dow Jones unchanged.

The market is responding positively to the purchasing managers’ index in the service industries (ISM) that was published a few minutes ago. It rose to 51.5 in August compared to 51.4 in July and a similar rate is expected, still in expansion territory (above 50).

For the time being, this figure removes the fears of a hard landing in the American economy, and this follows mixed employment data published earlier today – the number of hirings in the private sector in August was 99,000 workers, much lower than the expectation of 145,000 workers and the lowest figure since January 2021. Also the data for the month July was revised down when the original figure of an addition of 122,000 workers was revised down to 111,000 workers.

16:30

Trading on Wall Street is in a mixed trend. Nasdaq rises by 0.4%, S&P 500 is unchanged and Dow Jones falls by 0.2%. The beginning of the month was difficult after the market fell sharply on Tuesday due to disappointment with production data, but on Wednesday there was a certain relaxation in the market following the data on the number of new jobs in the market that were Much less than expected.

Investors are on alert for the important employment report that will be published tomorrow and how much it will indicate about the state of the world’s largest economy. The report to be published tomorrow afternoon expects 161 thousand new jobs created in August, more than July, the expected unemployment rate is 4.2%. The market estimates that this figure will determine the Fed’s rate of interest rate cut later this month.

Tesla Trading rises after the company announced yesterday the launch of its autonomous driver assistance software (FSD) in Europe and Asia in the first quarter of 2025, subject to regulatory approvals. Yesterday the company jumped by 4%. Despite the product name, FSD does not free the driver from sitting in the driver’s seat and taking his eyes off the road as well as taking the wheel when necessary.

Verint Falling in trading following the reports for the second quarter. The company reported revenues of 210 million dollars and a profit of 49 cents per share, the analysts’ expectation was for revenues of 213 million dollars and a profit of 53 cents per share. For the entire year Verint expects revenues of 933 million dollars and a profit of 2.9 dollars per share, a forecast that disappoints the analysts. The company announced a self-purchase plan in the amount of 200 million dollars until August 2026.

15:33

A few minutes ago additional employment data was published. The number of initial job requirements last week was only 227,000, compared to expectations of 230,000 and 231,000 last week.

In about an hour, the purchasing managers’ index in the services sector will be published.

15:15

US Macro: The ADP employment index indicated an increase of 99 thousand employed in the US private sector. The expectation was 144 thousand and the previous figure for the month of July amounted to an addition of 111 thousand employed.

This is the weakest growth rate recorded in the index in the last three and a half years, since January 2021, which signals the weakening of the US labor market. “The weakening of the US labor market led to slower than usual hiring after two years of growth,” said ADP’s chief economist , Nela Richardson.

At this time, there is no unusual reaction in the markets except for the government bond yields in the US which are falling slightly. The 10-year yield is down by 3 basis points and is trading around 3.73%. The two-year yield decreases by 4 basis points and stands at 3.72%.

14:10

The trading day in Europe is hourly in a mixed trend. The DAX index rises by 0.1%, the British Potsey sheds its value by 0.2% and the French CAC falls by 0.7%.

In the US, futures trade in a mixed trend.

company you discovered The Israeli company, which is engaged in the development of tiny satellite stations for communication, reported a short time ago that it won orders in the amount of over 12 million dollars from a satellite operator for the company’s SkyEdge platform.

12:20

The shareholders in the security software company Cognate They approved the management’s proposals – reappointed chairman Earl Shanks to the board of directors and voted in favor of the compensation package for CEO Elad Sharon – despite the opposition of the VBF private investment fund of the Valio Base investment house, which owns 9.3% of the shares and is the largest shareholder in Cognite.

At the same time, the proposal to appoint a director on behalf of Valio Base was not approved. The votes were in accordance with the recommendations of the advisory companies to the institutional bodies in the US. However, it seems that Beaulieu Base is not disappointed with the result, because their main claims against Cognite were that the company is not transparent enough and the directors are not doing enough, and in its announcement after the meeting the company stated that “we are aware that we have There is still a way and work to do, and we are committed to taking additional steps in the coming months to improve the composition of the board of directors and to provide additional disclosures.”

Cognite is a provider of software and analytics solutions for organizations and government bodies in the defense sector, and it is traded on Nasdaq at a value of 535 million dollars after an increase of about 16% in the share price from the beginning of 2024.

10:59

A mixed trend in Europe. The DAX is up 0.3%, the KAC is trading around the levels of the BASS and the FTSE is up 0.1%.

08:58

This morning in Asia, the main indices are trading in a mixed trend. The Nikkei fell by 1%, the Hang Seng shed about 0.7%, the Shanghai Stock Exchange fell by 0.1% and the Kospi shed about 0.5%.

Wall Street futures are trading lower this morning.

Contrary to the jarring opening recorded by the Wall Street indices at the beginning of September (Tuesday), last night (Wednesday), there was a recovery in the New York Stock Exchange: Nasdaq fell by 0.3%, the S&P 500 lost about 0.2% and the Dow Jones rose by 0.1%.

The change in trend on Wall Street last night was due to two reasons. The first is the words of the president of the Atlanta Fed, Rafael Bostic, who signaled last night (Wed) that he is ready to start lowering interest rates in the US even though inflation is still above the central bank’s target. Bostic is considered one of the more hawkish members of the Fed, who was in favor of a monetary policy as tight as possible to fight inflation. Now Bostick points out that he is focusing on the American labor market, where he sees a softening in the data: “I believe that we cannot wait until inflation really goes down to 2% to start reducing interest rates because it could risk disruptions in the labor market which may cause unnecessary pain and suffering,” Bostick noted.

The second reason for the recovery on Wall Street is the open job cycle survey for the month of July, which indicated a decrease in the amount of open jobs which amounted to approximately 7.67 million from 7.91 million the previous month. The expectation was 8.09 million.

● The biggest drop in value in history and the question: Is the air coming out of chip stocks?

Nvidia Matters came to a head last night after it was reported in Bloomberg that the US Department of Justice had subpoenaed the chip giant and other chip companies as it sought evidence that the chipmaker had violated antitrust laws. This is an escalation in the company’s investigation, Bloomberg reports.

However, Nvidia denied the reports last night after the end of trading: “We inquired with the US Department of Justice and did not receive a subpoena.” This was reported by CNBC. They added on behalf of the company: “However, we are happy to answer any questions that the regulator may have regarding our business

● 1,000% Surge and Crash: Why Are Investors Running Away from This Chip Stock?

Fresh dollar Plunged last night by about 20% after the company missed the forecasts in the line of revenues in the second quarter of the year and cut the forecast for the whole year. The company estimates that the profit per share will be in the range of 5.20-5.60 dollars, compared to the previous forecasts published by the company which were 6.5-7 dollars per share. The analysts expected that the forecast for earnings per share would be $6.56 per share.

In the US, bond yields also traded lower, the 10-year government yield stood at 3.8%, and the two-year bond rate dropped to 3.85%.

In addition to the recovery recorded last night (Wednesday) in Wall Street indices, US government bond yields fell sharply, with the two-year yield falling by about 10 basis points and trading around 3.77%. The 10-year yield also decreased and stood at a level of 3.79%. This means that the American yield curve has returned to its “normal” shape, with long-term yields higher than short-term yields, a sight not seen in the last two and a half years.

Bloomberg Odier emphasize that they prefer German and British bonds over US bonds: “Despite the sharp decline in global yields, the yields of government bonds are still higher than the long-term averages, which indicates that they are attractive to investors looking for a long-term investment. Investors seek refuge in assets such as government bonds due to the increased risks and market volatility. The future will depend on the balance between growth risks, inflation and geopolitical risks.

“In the US, economic dynamics are weakening, as shown by weak job creation and a rising unemployment rate. The market expects the Fed to cut interest rates by 25 basis points in September and by nearly 100 basis points by the end of the year, with the prospect of more aggressive action if economic conditions deteriorate. We are skeptical about recession risk and estimate that the short-term yields may be unstable in light of the high expectations for interest rate cuts. Politically, the race for the presidency has tightened after the retirement of Joe Biden, with an almost equal chance between Kamala Harris and Donald Trump.

“We believe that a Trump victory could lead to higher growth and higher inflation, while a Harris victory could lead to policy continuity and lower inflation. In the race for Congress, the outcome is too close to predict, so we prefer to focus on strategies that raise returns and be flexible about the length of the period. We maintain a neutral position Regarding US bonds with preference for a term of 5-7 years and continue to see US inflation-protected bonds as an interesting hedge in the event of a Republican victory.

“In Europe, the European Central Bank is expected to continue interest rate cuts in September to deal with an economic slowdown, and we expect two more cuts by the end of the year. We prefer 5-7 year German bonds over US bonds, as German bonds are expected to benefit from cuts Further interest rates and the weakening of the euro. German bonds have served as an anchor against expansionary fiscal policy concerns, and may benefit from the current geopolitical uncertainty. Despite attractive valuation of French government bonds, we prefer bonds from countries with more stable debt channels.

“In the UK, political risks and expectations of interest rate cuts from the Bank of England are likely to drive economic activity, especially after signs that inflation is slowing. We prefer 5-7 year UK bonds over US bonds, with support from GBP weakening forecasts and the potential for deeper rate cuts from the Central Bank”.

In the commodity market, the price of crude oil rose slightly this morning (Thursday) to 69.4 dollars per barrel, the price of a Brent barrel fell to 72.9 dollars.

Citibank estimates that if OPEC+ does not reduce oil production, the average price of oil may drop to $60 per barrel in 2025 due to reduced demand and increased supply from non-OPEC countries, as reported by Reuters. At Citi, they emphasize that a recovery in oil prices is possible, but the market may lose confidence in OPEC+, which is trying to maintain a level of 70 dollars per barrel.

Citi also emphasizes that the geopolitical tensions were expected to raise oil prices, but it seems that the market recognizes that the tensions in the Middle East will not necessarily lead to production problems.

In the macro sector, the eyes of investors on Wall Street are directed towards the employment data for the month of August in the US which is expected to be published tomorrow (Fri). The data is expected to shed light on the rate at which the Fed will decide to lower interest rates. If a strong employment report is published, it is likely that the Fed will reduce the The interest rate by only 25 basis points. However, if data is published that indicate a slowdown in the labor market, the chances that the Fed will reduce the interest rate by 50 basis points will increase, and this in light of the fears of a recession.

At the Goldman Sachs bank, they provide a forecast according to which the labor market will present an increase of 155 thousand new jobs in August, and an unemployment rate of 4.2%. The expected increase in employment is lower than the consensus forecast due to negative effects in the last decade that are manifested in weak reports in August.

The increase in hourly wages is expected to stand at 0.3% in the monthly report, bringing the annual increase to 3.7%. The vacancy index is expected to drop slightly to 8.1 million, but still indicates a healthy demand for work according to Goldman.

Pickett Bank adds that this week’s wage data and job additions in the US are critical data to reassure the markets that the world’s largest economy remains on track for a soft landing and is not headed for recession. The latest growth and inflation data indicated a lower risk of recession, and investors hope that the employment data will also calm concerns.

Data from the OECD countries shows that during July the annual inflation in the organization’s countries dropped to 5.4% from 5.6% in June, but with considerable differences between the countries. In 17 of the 38 OECD countries, inflation increased, in 11 of them it decreased, and in 10 countries it was more or less stable. Annual energy inflation in the OECD rose sharply to 3.3%, from 2.3% in June, while core food inflation declined.

Bank of America slightly lowered its global growth forecasts for 2024 and 2025. The bank emphasizes the disappointment of the lack of sufficient relief in China and the European economy which continues to be the “weakest link”.

The American bank emphasizes that the global economy continues to demonstrate general resilience, but downside risks are beginning to appear: “Compared to our previous forecasts, we are adjusting our global growth and inflation forecast slightly downward, mainly due to weak data in China. We now expect the global economy to grow by 3.1% and 3.3% this year and next year.”

As far as the US is concerned, the bank emphasizes that geopolitics and elections remain the most relevant risks due to the impact on the uncertainty in monetary policy, but in their estimation, “recession fears are exaggerated.”