After the falls on Wall Street on Friday, the Tel Aviv Stock Exchange also painted red: the Tel Aviv 35 index plunged 2.9%, the Tel Aviv 125 index fell 3%, and the banks index fell 2.75%.
The declines in the home estate are a direct response to the falls recorded in U.S. trade last Friday.
It should be noted that last week was the worst week for the US indices since October 2020. This is against the background of growing expectations that the Federal Reserve will begin the round of interest rate hikes and balance sheet cuts in the coming months to fight 40-year highs.
The Nasdaq was down 2.75%, the S & P500 was down 1.9%, and the Dow was down 1.3% at the close of trading on Wall Street last Friday. Of 2021 with a lower-than-expected forecast of a number of new subscribers.The stock lost close to 23% of the campaign and pulled the US indices down.
Is this a change in trend in technology stocks?
In the next two weeks, a clear picture will emerge when the other technology companies publish their reports for the fourth quarter.
Apple, Microsoft and Intel will report this week, and Amazon, Facebook and Google the following week.
According to Guy Beit Or, Psagot Investment Chief Economist, "Raising interest rates and draining liquidity in the markets inevitably leads investors to re-price the markets with supply chain disruptions continuing, oil and commodity prices peaking and economic data beginning to signal private consumer weakness."
Beit Or notes that the Nasdaq index entered the territory of correction last week, and is 14.2% below the peak it reached last November.
"The current situation in the markets is complex, and in light of the high and temporary inflation environment it is difficult to see how the Federal Reserve can reassure since interest rate hikes as well as balance sheets are a temporary order, and after years of unprecedented returns investors need to prepare for a period of increased market volatility."
According to Bloomberg News, one of the reasons for this is investors' fears that the economic recovery will lead to a weakening in high-tech growth.
As, for example, in the case of Netflix, which benefited from the corona period and the closures, but over the weekend disappointed investors with a lower-than-expected forecast of new subscribers.
The crypto market also suffered huge losses over the weekend.
The price of bitcoin lost more than 10% over the weekend after Russia's central bank proposed banning trading in cryptocurrencies in the country for fear of threatening Russia's financial stability.
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