The Tel Aviv Stock Exchange opened the trading week this morning with substantial falls following the sharp falls in New York on Friday, after the disappointing US employment report for January. The aggregate arbitrage gap for Israeli stocks listed in Tel Aviv and New York is a negative 0.95%.
The US labor market added only 151 thousand jobs in January, far fewer than the 192 thousand jobs that analysts had expected, although the unemployment rate in the US fell to 4.9%, below the expected figure of 5%.
In the light of the jobs figures, the US Federal Reserve will probably choose to sit on the fence and not raise its interest rate for March, after making the first interest rate hike in a decade at the end of 2015, among other things on the basis of good employment figures.
In local news, S&P reiterated its sovereign ratings for Israel at A+/A-1 at the end pf last week, saying that "We expect the Israeli economy to weather potential volatility in the global economy and international financial market, thanks to its diversified economy, strong external position, and flexible monetary framework."
In its weekly market review, Bank Leumi recommends making no change to the equities component of investment portfolios, after recommending a reduction in exposure to equities from high to medium in 2015. Bank Leumi sees negative developments in the Chinese economy as the most significant risk at present. The bank's analysts also point to the widening gap in the global economy between service industries, which continues to grow, and traditional manufacturing, which is in a "less favorable" position.
The Tel Aviv 25 Index is currently down 1.23%, and the Tel Aviv 100 Index is down 1.17%.
Leading trading so far today are Bezeq, down 0.42%, Teva, down 2.4%, Bank Hapoalim, down 0.88%, Bank Leumi, down 1.16%, and Osem, up 0.25%. Nice Systems is down 1.03%. Osem is being buoyed by the offer to purchase from Nestle at NIS 82.5 per share, which compares with a current price of NIS 80.30.
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2016
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