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Israel Holds Rates as Bank Waits for War Inflation to Slow

Israel kept interest rates on hold for a ninth straight meeting, with the central bank waiting for war-induced inflation to slow before starting an easing cycle.

The Bank of Israel held its base rate at 4.5%, according to a statement on Monday, a decision in line with all analysts in a Bloomberg survey.

“In view of the continuing war, the Monetary Committee’s policy is focused on stabilizing markets and reducing uncertainty, alongside price stability and supporting economic activity,” the central bank said in a statement following the decision.

Guidance was unchanged from previous months. “The interest-rate path will be determined in accordance with the convergence of inflation to its target, continued stability in the financial markets, economic activity, and fiscal policy,” the central bank said.

Israel’s economy is starting to recover from the strain of conflicts with Iranian-backed militant groups, after ceasefires in Gaza and in Lebanon. Yet annual inflation is running at 3.8%, above the country’s official target of 1% to 3%. That’s mainly due to a hike in value-added tax aimed at funding Israel’s higher defense needs and in electricity and water costs.

Citigroup Inc. said ahead of Monday’s rates decision that Governor Amir Yaron may start cutting rates by May, provided inflation decelerates and risk premiums related to Israel’s conflict remain under control.

The central bank noted that, according to forecasters’ projections, inflation should fall below 3% in the second half of the year, and that 12-month expectations are within the target range.

“In contrast to the situation in the US, inflation expectations in Israel are low, and the fiscal situation also looks better,” Bank Hapoalim, one of Israel’s two largest lenders, said in a note to clients last week.

Bringing inflation down is seen as one of the last major obstacles to monetary easing, with Israeli assets, including the shekel and the country’s credit-default swaps, having largely stabilized on the back of the truces from late last year.

The Israeli shekel is up 1.8% against the dollar in 2025, roughly in line with other so-called expanded-major currencies tracked by Bloomberg.

But there’s no guarantee the ceasefires will hold, particularly in Gaza. The initial stage of that pause ends this coming weekend, and there’s been little indication yet that terms on an extension will be agreed.

Another cause for uncertainty is the 2025 budget, which is meant to be passed by the end of March. There’s a chance it could be derailed by members of Prime Minister Benjamin Netanyahu’s coalition over domestic political disputes.

Lower borrowing costs could help boost Israel’s $550 billion economy. Gross domestic product rose 1% last year, the lowest in over two decades, excluding the Covid-19 pandemic. That was mainly due to a slump in investments, exports and private consumption, which offset an increase in defense-related expenditure.

News Team by — February 25, 2025 By News Team in World News
‘People are really bulled up’: Stock surge has some on Wall Street worried

Donald Trump’s election helped turbocharge an already surging bull market in the U.S., sending stocks and cryptocurrencies to record highs.

Now, some on Wall Street are beginning to sound the alarm that the fast times can’t last.

JPMorgan Chase CEO Jamie Dimon and others have warned that investors are plowing cash into stocks with inflated prices. Hedge fund giant Elliott Management said the blistering rise in crypto over the last year, with bitcoin up 89 percent, is the stuff of bubbles. So-called memestocks — companies like GameStop, whose shares tend to be driven by investor hype — have returned. And on top of that, economists say Trump’s plans for tariffs and an immigration crackdown — along with the dizzying pace of his policy moves — could roil the markets by stoking inflation and fueling uncertainty.

“For good or bad, depending on your politics, we’re back to the chaos presidency,” said Jim Chanos, a hedge fund manager who famously bet against Enron and other failing companies. “Whatever you might think about the Biden administration, if you were a market participant, you generally didn’t need to check your Twitter feed the first thing in the morning when you woke up just to see what was said. But we’re back to that, and with that, comes probably more volatility.”

It isn’t just Trump, of course. The markets are coming off back-to-back banner years fed by a mix of pandemic stimulus money, wild optimism about artificial intelligence, and a supersized interest rate cut by the Federal Reserve last year. But the brewing anxiety over an overvalued market now portends potential problems for the White House.

Trump — who is fond of touting market highs as indications of his success as America’s chief executive — is fixated on lifting up businesses and consumers. A stock market slide could undercut his reputation as a pro-growth president and scramble his administration’s economic plans if it’s forced to deal with the fallout.

“Everyone who puts on the nightly news or even watches Twitter knows what the stock market does every day,” said Ed Hill, a veteran financial industry lobbyist. “It’s become a preferred measure of the economy, even though we all know it doesn’t really reflect the economy. People are going to be very sensitive. This administration particularly is going to be very sensitive to markets.”

To be sure, naysayers are nothing new on Wall Street or in crypto, and Trump’s allies argue that the president’s plans will boost the markets over time.

Hal Lambert, a Republican donor and founder of investment management firm Point Bridge Capital, said the combination of Elon Musk’s cost-cutting campaign, the expected extension of the 2017 tax cuts, and lower oil prices represent major economic windfalls to come. And in the meantime, he said, U.S. stock investors aren’t going anywhere.

“People aren’t going to sit around and hold money markets, and they’re not going to sit around and buy three [or] four percent Treasuries,” Lambert said. “They’re going to keep investing in the equity markets.”

Indeed, investors aren’t slowing down much. The benchmark index for U.S. stocks, the S&P 500, closed at a new all-time high Wednesday. And crypto has continued to surge, with bitcoin — the world’s most valuable crypto token — remaining at sky-high valuations after breaking through $100,000 earlier this year.

Most Wall Street banks and research shops still believe investors are in for a generally positive 2025, as do everyday buyers themselves. More than half of consumers are expecting stocks to increase over the course of 2025, according to the Conference Board.

News Team by — February 25, 2025 By News Team in Market Watch
Nasdaq, S&P 500 fall as AI caution weighs on tech, Nvidia results in focus

The Nasdaq Composite fell more than 1% on Monday, with big technology stocks creating the biggest drag as investors worried about demand for technology supporting artificial intelligence while they waited for results from market heavyweight Nvidia. The S&P 500 closed slightly lower, marking its third straight day of declines, while the Dow managed to eke out a tiny gain. It was also Nasdaq’s third consecutive loss and its fourth daily drop of more than 1% so far in February. Investors were concerned about future demand for Nvidia’s (NVDA.O), opens new tab pricey AI chips as they awaited its quarterly results on Wednesday. Worries about hefty spending on the technology have mounted since low-cost AI models from China’s DeepSeek rattled the industry in January. Adding to uncertainty, a TD Cowen analyst note published late on Friday reported that Microsoft Corp (MSFT.O), opens new tab has scrapped leases for sizeable data center capacity in the U.S., suggesting a potential oversupply of AI infrastructure. Microsoft said its plan to invest over $80 billion in AI and cloud capacity this fiscal year was intact but that it “may strategically pace or adjust” infrastructure in some areas. “Markets are already jittery and looking for a reason to take profits,” said Gene Goldman, chief investment officer at Cetera Investment Management, noting that any question about AI is seen as a reason to take profits since the technology has driven market growth for the last few years. Along with worries about tariffs and inflation, investors are getting more anxious about economic growth after last week’s batch of weak economic data and a disappointing forecast from Walmart (WMT.N), opens new tab. “Volatility is being driven by market uncertainty about whether we’re facing a growth scare or an inflation scare,” said Goldman. The Dow Jones Industrial Average (.DJI), opens new tab rose 33.19 points, or 0.08%, to 43,461.21, the S&P 500 (.SPX), opens new tab lost 29.88 points, or 0.50%, to 5,983.25 and the Nasdaq (.IXIC), opens new tab lost 237.08 points, or 1.21%, to 19,286.93. The more defensive healthcare index (.SPXHC), opens new tab led percentage gains, closing up 0.75% while technology (.SPLRCT), opens new tab was the biggest laggard, ending down 1.43%. Nvidia was the S&P 500’s biggest index point drag, ending the session down 3.1%, and it was followed by chip maker Broadcom Inc (AVGO.O), opens new tab, down 4.9%, Amazon.com (AMZN.O), opens new tab, down 1.8%. Microsoft shares ended down 1%. The tech sector’s biggest percentage decliner with, a 10.5% drop, was another popular AI stock, Palantir Technologies (PLTR.O), opens new tab. “The dominance of the AI tech trade has run its course, not that these companies aren’t great stocks. We’re headed for a major digestion phase,” said Peter Boockvar, CIO at Bleakley Financial Group. On the data front, the Personal Consumption Expenditure index – the Federal Reserve’s preferred inflation gauge – is expected on Friday and could help markets gauge the timing of the central bank’s first rate cut this year. Interest rate futures indicate trader expectations that the Fed will leave borrowing costs unchanged until June, according to CME Group’s FedWatch, opens new tab tool. In individual stocks, Apple (AAPL.O), opens new tab finished up 0.7% after the iPhone maker unveiled plans to spend $500 billion in U.S. investments in the next four years, including setting up a factory in Texas for AI servers. Berkshire Hathaway (BRKa.N), opens new tab, shares hit record highs in early trading, after Warren Buffett’s conglomerate reported a record annual profit and its class B shares ended up more than 4%. Nike (NKE.N), opens new tab finished up 4.9% after Jefferies raised its rating to “buy” from “hold”. Declining issues outnumbered advancers by a 1.25-to-1 ratio on the NYSE where there were 90 new highs and 134 new lows. On the Nasdaq, 1,518 stocks rose and 2,888 fell as declining issues outnumbered advancers by a 1.9-to-1 ratio. The S&P 500 posted 28 new 52-week highs and 8 new lows while the Nasdaq recorded 40 new highs and 232 new lows. On U.S. exchanges about 15.32 billion shares changed hands compared with the 15.34 billion average for the last 20 sessions.
News Team by — February 25, 2025 By News Team in Market Watch
Estimating The Intrinsic Value Of Hims & Hers Health, Inc. (NYSE:HIMS)

Today we will run through one way of estimating the intrinsic value of Hims & Hers Health, Inc. (NYSE:HIMS) by taking the expected future cash flows and discounting them to their present value. We will use the Discounted Cash Flow (DCF) model on this occasion. Don’t get put off by the jargon, the math behind it is actually quite straightforward.

Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.

The Method

We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second ‘steady growth’ period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.

A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today’s value:

10-year free cash flow (FCF) estimate

 

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

Levered FCF ($, Millions)

US$249.4m

US$322.0m

US$377.4m

US$425.9m

US$467.8m

US$503.8m

US$535.2m

US$562.9m

US$587.9m

US$611.1m

Growth Rate Estimate Source

Analyst x1

Analyst x1

Est @ 17.20%

Est @ 12.86%

Est @ 9.83%

Est @ 7.71%

Est @ 6.22%

Est @ 5.18%

Est @ 4.45%

Est @ 3.94%

Present Value ($, Millions) Discounted @ 6.2%

US$235

US$285

US$315

US$335

US$346

US

The second stage is also known as Terminal Value, this is the business’s cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country’s GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.8%) to estimate future growth. In the same way as with the 10-year ‘growth’ period, we discount future cash flows to today’s value, using a cost of equity of 6.2%.

Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$611m× (1 + 2.8%) ÷ (6.2%– 2.8%) = US$18b

Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$18b÷ ( 1 + 6.2%)10= US$9.9b

The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$13b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$49.3, the company appears about fair value at a 18% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.

dcf
NYSE:HIMS Discounted Cash Flow February 24th 2025

Important Assumptions

Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don’t agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company’s future capital requirements, so it does not give a full picture of a company’s potential performance. Given that we are looking at Hims & Hers Health as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we’ve used 6.2%, which is based on a levered beta of 0.800. Beta is a measure of a stock’s volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.

SWOT Analysis for Hims & Hers Health

Strength

  • Currently debt free.

Weakness

  • No major weaknesses identified for HIMS.

Opportunity

  • Annual earnings are forecast to grow faster than the American market.

  • Current share price is below our estimate of fair value.

Threat

  • Revenue is forecast to grow slower than 20% per year.

Moving On:

Whilst important, the DCF calculation ideally won’t be the sole piece of analysis you scrutinize for a company. It’s not possible to obtain a foolproof valuation with a DCF model. Preferably you’d apply different cases and assumptions and see how they would impact the company’s valuation. For example, changes in the company’s cost of equity or the risk free rate can significantly impact the valuation. For Hims & Hers Health, we’ve put together three fundamental aspects you should explore:

  1. Risks: Take risks, for example – Hims & Hers Health has 1 warning sign we think you should be aware of.

  2. Future Earnings: How does HIMS’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.

  3. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!

PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.

News Team by — February 25, 2025 By News Team in Equities
Why Lumen Stock Sank Today

Falling Red Arrow Chart on Black Background 3D Illustration

Lumen (NYSE: LUMN) stock lost significant ground Monday. The company’s share price closed out the day down 7.1%. The broader market saw bearish momentum in the session, with the S&P 500 and the Nasdaq Composite falling 0.5% and 1.3%, respectively.

Tech stocks retreated today as investors braced for potential impacts from Nvidia’s upcoming quarterly report. Lumen and other artificial intelligence (AI) stocks also saw their valuations pressured by recent reports about Microsoft’s data center spending plans.

Lumen stock tumbles ahead of Nvidia’s highly anticipated Q4 report

Nvidia will report its fourth-quarter results and host an investor conference call after the market closes on Wednesday, and it’s poised to be the most important earnings release of 2025 so far. The average Wall Street analyst estimate anticipates that the business will have posted net income of roughly $21.2 billion on revenue of $38 billion.

Beating the market’s sales and earnings targets for Q4 could be central to powering a return of bullish momentum for tech stocks in the near term. On the heels of recent developments and reports, the company’s forward guidance could be even more important.

What will Nvidia’s results say about Lumen’s outlook in AI?

In addition to jitters surrounding Nvidia’s Q4 report, Lumen stock’s pullback today was also driven by recent news surrounding Microsoft. According to recent reports, the tech giant is planning to cut back on some previously planned data center expansion initiatives. This news comes on the heels of recent comments from CEO Satya Nadella that raised concerns about the hype surrounding AI versus the real-world value it’s actually created.

Lumen’s big stock gains over the last year have been aided by the company landing deals to provide private-connectivity-fabric technologies for Microsoft’s AI data centers. If Microsoft were to significantly cut back on its AI infrastructure buildout plans, it could mean a significantly weaker growth outlook in the category for Lumen. Microsoft has been Nvidia’s largest customer lately, so investors should get a better idea of the software giant’s plans by analyzing Nvidia’s sales guidance for the current quarter.

News Team by — February 25, 2025 By News Team in Equities
Starbucks is overhauling its menu. Is your favorite drink among the 13 to get 86’d?

The Starbucks drink menu is getting an overhaul next week. The coffee chain will remove some of its less popular hot, cold and blended drinks starting March 4 in an effort to speed up service and lighten the load on baristas. Big orders with complicated modifications have made it difficult for baristas to keep up, leading to dissatisfied customers and a decline in company sales, Bloomberg reported. “As part of our plan to get back to Starbucks, we’re simplifying our menu to focus on fewer, more popular items, executed with excellence,” Starbucks told Today.com. “This will make way for innovation, help reduce wait times, improve quality and consistency, and align with our core identity as a coffee company.” The decision is part of chief executive officer Brian Niccol’s overall goal to streamline company operations. In a letter to employees Monday, Niccol announced there will be layoffs for 1,100 global corporate employees. The layoffs won’t impact store baristas. “Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” Niccol said in the letter.

Which 13 drinks are getting cut from the menu?

These are the drinks being eighty-sixed, along with an alternative suggested by Starbucks: ❌ Iced Matcha Lemonade ➡️ Alternative: Iced Green Tea Lemonade, which has similar citrus and grassy flavors. ❌ Espresso Frappuccino and Caffè Vanilla Frappuccino ➡️ Alternative: Coffee Frappuccino, which is a blend of coffee, milk and ice. Customers can also add espresso or syrup. ❌ White Chocolate Mocha Frappuccino ➡️ Alternative: Mocha Frappuccino. ❌ Java Chip Frappuccino ➡️ Alternative: Mocha Cookie Crumble Frappuccino, which also has little chocolate morsels with a similar texture. ❌ Chai Crème Frappuccino, Caramel Ribbon Crunch Crème Frappuccino, Double Chocolaty Chip Crème Frappuccino, Chocolate Cookie Crumble Crème Frappuccino and White Chocolate Crème Frappuccino ➡️ Alternatives: Vanilla Bean Crème Frappuccino, which can have flavorings added, or Strawberry Crème Frappuccino. ❌ White Hot Chocolate ➡️ Alternative: Hot Chocolate can be customized with Mocha or White Chocolate Mocha sauce. ❌ Royal English Breakfast Latte ➡️ Alternative: London Fog Latte. ❌ Honey Almondmilk Flat White ➡️ Alternative: Flat White, which can be made with any nondairy milk and preferred sweetener.

Some additional changes in the works

Be prepared for even more drinks — and food items — to be nixed by the end of the fiscal year in September as the company strives to hit its goal of eliminating 30% of its U.S. menu. Some elements of mobile ordering have also recently changed. A maximum of 12 items per order is now in place, down from 15. And the ability to customize certain items, like adding lemonade or milk to a Refresher, has been removed because those options are already on the menu. Niccol has also pledged to improve the customer experience by getting back to the company’s coffeehouse roots and making stores feel cozier, with handwritten notes on cups and ceramic mugs for “to stay” orders.
News Team by — February 25, 2025 By News Team in Business News
German business leaders say new government must act quickly to rescue stagnant economy

Wall Street is gearing up for Nvidia’s (NVDA) fourth quarter earnings results to come out this Wednesday, February 26. However, not all expert investors are so bullish on the semiconductor manufacturer. The Bahnsen Group CIO David Bahnsen sits down with Catalysts hosts Seana Smith and Madison Mills along with Yahoo Finance executive editor Brian Sozzi to present why he is bearish on the chip giant, weighing in on Nvidia’s valuation and growth expectations. “If you compare its earnings multiple to some of the other AI companies, let alone other Mag Seven and, of course, other S&P names, it’s at an incredible premium. Now, I agree it’s earned it, I agree it’s deserved it and generated the order flow,” Bahnsen explains. “But one of the key things that was said… it’s just simply untrue that it’s a monopoly. Nobody in their right mind thinks Nvidia is a monopoly. There’s tons of competition, but all the earnings multiple estimates are based on them never having competition.
News Team by — February 25, 2025 By News Team in Business News