Despite cautious remarks from Fed officials regarding interest rate cuts, global markets are on a positive trajectory due to corporate profits exceeding expectations during the intense earnings season.
Yesterday, the shares of the American software company Palantir gained more than 30% after announcing revenues that surpassed expectations, drawing attention. Similarly, GE HealthCare Technologies, a medical technology company, witnessed a nearly 12% increase in shares following better-than-expected results.
While Fed officials continued their statements, Loretta Mester, President of the Cleveland Fed, mentioned the possibility of lowering interest rates by the end of this year if the economy performs as expected. Emphasizing that lowering interest rates too early would be a mistake, Mester expressed her openness to three interest rate cuts this year.
Neel Kashkari, President of the Minneapolis Fed, stated that despite progress in inflation, the desired point has not yet been reached. He found it “quite promising” that the U.S. could avoid a recession this year in an environment with a strong labor market.
In the currency markets, the probability of the Fed starting an interest rate cut in March is priced at 22%, and for May, it is 66%.
Meanwhile, U.S. Treasury Secretary Janet Yellen expressed concerns about the commercial real estate sector due to high interest rates and changing work models after the pandemic. However, she believes the situation is manageable.
According to the Household Debt and Credit Report published by the New York Fed, credit card delinquencies increased by about 60% on an annual basis in 2023.
The first of this week’s U.S. Treasury bond sales, a $54 billion 3-year bond auction, resulted in a 7 basis point decline in the yield of the 10-year Treasury bond to 4.09%, and it is currently trading flat.
Gold’s ounce price closed at $2,036 with a 0.5% increase yesterday, and it is currently trading just below its previous close at $2,035. The barrel price of Brent crude oil is at $78.50.
Moreover, positive developments in ceasefire talks between Israel and Palestine contribute to a reduction in risk perception.
Yesterday, on the New York Stock Exchange, the Nasdaq index rose by 0.07%, the S&P 500 index by 0.23%, and the Dow Jones index by 0.37%. Index futures in the U.S. started the new day with a mixed trend.
While positive momentum dominated European stock markets yesterday, today’s focus in Germany is on industrial production data.
Analysts noted that the data released in Europe indicates a slowdown in economic activity across the region but is positively received as inflation continues to cool.
According to the Consumer Expectations Survey by the European Central Bank (ECB), consumers’ inflation expectations for the next 12 months decreased from 3.5% in December 2023 to 3.2%. Expectations for inflation over the next three years, on the other hand, increased from 2.4% to 2.5%.
The euro/dollar parity, which has been trading near its lowest levels in the past two months, started the day flat at 1.0760.
Yesterday, the FTSE 100 index in the UK increased by 0.90%, the DAX 40 index in Germany by 0.76%, the MIB 30 index in Italy by 0.53%, and the CAC 40 index in France by 0.65%. Futures contracts in European indices also started the new day with an upward trend.
While mixed trends are notable in Asian stock markets, the effects of the Chinese government’s announcement of additional purchases of Exchange Traded Funds (ETFs) by the country’s sovereign wealth fund to prevent a decline in the stock market continue.
In Japan, as companies continue to disclose their financial statements, investors are focusing on firms’ income and profit forecasts for the upcoming period.
In the country, the net profit of the three largest financial firms, Mitsubishi UFJ, Sumitomo Mitsui FG, and Mizuho Financial, for the April-December 2023 period reached the highest seasonal profit so far.
Near the closing in Japan, the Nikkei 225 index decreased by 0.1%, the Hang Seng index in Hong Kong by 0.3%, the Kospi index in South Korea increased by 0.9%, and the Shanghai Composite index in China rose by 0.8%.
In the domestic market, Borsa Istanbul, which carried its upward trend to the 10th consecutive trading day yesterday, completed the day at 8,869.14 points with a 1.05% gain, breaking the daily closing record. The index reached its highest level at 8,890.52 points.
The dollar/TL, after following a sideways trend and closing the day at 30.5531 yesterday, is trading at 30.5970 in the interbank market at the opening today.
Analysts suggest that today, domestic markets will follow the Treasury cash balance domestically and the UK house price index, industrial production in Germany, and U.S. foreign trade deficit data internationally. From a technical perspective, they note that 8,900 and 9,000 levels are resistance, while 8,800 and 8,700 points are support for the BIST 100 index.
Key data to be monitored in the markets today:
10:00 UK, December house price index
10:00 Germany, December industrial production
16:30 U.S., December foreign trade balance
17:30 Turkey, January Treasury cash balance
source: aa.com.tr / prepared by Melisa Beğiç