Global Markets React to Economic Shifts, Tech Giants Shine

Global bond markets experienced significant volatility, with yields on U.S. 10-year Treasury notes reaching a high of 5.34%, the highest since 2002, and 30-year notes touching 5.68%. Similar trends were observed in the UK, Germany, and Japan, with their respective long-term bonds hitting multi-year highs. This surge in yields occurred despite weaker-than-expected U.S. employment data for September, which saw only 29,000 new jobs added, significantly below the projected 90,000. July and August figures were also revised downward by 60,000 jobs, and the unemployment rate rose to 4.2%.

Investor reaction to the U.S. jobs report was swift, with the probability of an October Federal Reserve interest rate hike plummeting. However, the longer end of the yield curve did not fully reflect the Fed's potential actions, with analysts suggesting it was pricing in factors like oil prices, deficits, and general uncertainty. Core inflation, measured by the PCE index, remained stable at 3%, still distant from the target.

In Europe, France faces economic challenges, with its 10-year bond yield nearing 4.96%, a level not seen since 2002, and the spread over German bonds widening significantly. France's debt stands at 119% of its GDP and is projected to reach 121%, with interest expenses expected to hit €91 billion next year. Political instability further complicates the situation, hindering reform efforts.

In the technology sector, Nvidia announced an additional $150 billion in share buybacks, bringing the total to $235 billion, and its stock reached an all-time high. Micron reported strong earnings, exceeding expectations with a profit per share of $33.42 and providing an optimistic forecast, though its stock saw little movement. Tesla surprised the market with 486,532 vehicle deliveries in the quarter, surpassing estimates, causing its stock to jump 4.7%. Nike, however, missed revenue expectations and issued a weak forecast for 2027, leading to a sharp decline in its stock price, trading near a 12-year low.

On the Tel Aviv Stock Exchange, a shortened trading week concluded with declines. However, chip-related stocks like Camtek and Nova saw gains of around 10%, mirroring global trends. El Al Airlines experienced a significant surge of 15.5% during the week, following an attempted attack on a Flydubai flight to Tel Aviv.