Tel Aviv Stock Exchange Opens Amid US Bond Market Calm and Local Earnings Reports

The Tel Aviv Stock Exchange is set to open with a balanced outlook following a calming in the US government bond market, aided by recent Treasury Department measures in Washington that supported a green close on Wall Street. The local earnings season is accelerating, with several companies including Altshuler Shaham, Damari, Nofar Energy, Phoenix, and Shikun & Binui expected to release financial reports this morning.

Dual-listed stocks are returning to trade in Tel Aviv with minimal impact on the TA-35 index, reflecting mixed trends from New York. Technology and defense stocks such as Tower Semiconductor, Elbit Systems, Camtek, and Te'at Technologies are under pressure, while Nova, Palo Alto Networks, and Formula Systems show gains. Asian markets are also positive, led by South Korea's Kospi index surging about 6%, driven by sharp rebounds in memory chip giants SK Hynix and Samsung. Japan’s Nikkei and Hong Kong’s Hang Seng indices also rose.

Yesterday, the Tel Aviv market closed mixed, with the TA-35 down 0.2% and the TA-90 up 0.6%. The technology sector fell sharply due to semiconductor stock declines, mirroring Wall Street’s SOXX ETF drop. Conversely, the insurance index rose 4.2% following Clal Insurance’s strong Q2 results, and the oil and gas index gained 3.5% amid positive reports from Delek Group and rising global oil prices. Notably, Beit Shemesh Engines reported a 19% revenue increase and more than doubled net profit to $16 million in Q2, while Delek Group posted a 24.2% revenue rise and a 78.4% net profit increase.

In the US, Wall Street ended Wednesday positively, breaking a three-day losing streak, with the S&P 500 up 0.4% and Nasdaq rising 0.3%. The key driver was a sharp recovery in the US Treasury bond market after the Treasury announced an expansion and doubling of its long-term debt buyback program starting in September. This move helped yields retreat from multi-decade highs. However, strategists caution that the upward trend in yields may not have peaked yet due to global inflation concerns and rising government deficits.

Commodity markets saw Brent crude rise 0.7% to $91.62 per barrel, supported by Middle East geopolitical tensions, including the UAE freezing economic ties with Iran. Gold prices surged over 3% to a two-and-a-half-month high, boosted by falling bond yields and a weaker dollar. Bitcoin also jumped 7.7% to about $68,476, its strongest day since March, following positive regulatory signals in the US.

On the macroeconomic front, Federal Reserve minutes from July revealed deep internal divisions over interest rate policy, with some officials advocating immediate hikes while others favored holding steady. Bank of America projects three rate increases this year driven by rapid AI investment growth, which is expected to boost productivity and job creation. Meanwhile, retail sales and employment data have tempered market expectations for a September hike.

In corporate news, Target’s stock has surged over 53% this year, driven by CEO Michael Fiddelka’s aggressive pricing strategy and operational efficiency improvements. Analysts see potential for continued growth, though inflation and competition remain risks. Investors now await Walmart’s Q2 earnings report, with expectations of moderate revenue growth and earnings, amid concerns over inflation and geopolitical tensions impacting consumer spending.