Global markets confused after balance sheets

The intensified macroeconomic data agenda and growing equity-based moves in balance sheet season continue to have an impact on the direction of the markets. According to financial results announced yesterday, the revenue of Apple and Amazon, one of the leading technology companies in the US, increased in the third quarter, while the revenue of Intel decreased.

As Amazon’s fourth-quarter earnings expectations were well below market expectations, the company’s contract in the futures markets fell by more than 10 percent, while the company’s expectations indicated that fear to the recession continues to spread in the country.

In the Amazon report, it was stated that people’s disposable income decreased due to inflation, and this situation negatively affected the company’s operations.

GROWTH DATA DID NOT ASSESS RESSION CONCERNS

According to macroeconomic data released yesterday, the Gross Domestic Product (GDP) rose 2.6 percent in the third quarter. The US economy, which recovered more than expected, was expected to grow 2.4 percent.

Although recession concerns were partially allayed by the data in question, they flared up again with prices in bond markets.

The spread between the 10-year US bond yield and the 3-month Treasury bill yield, which is seen as a recession signal for the coming period, continued to rise in the negative direction, reaching about 10 basis points. The US 10-year bond yield, which has declined by about 30 basis points since the start of the week, is at 3.93 percent and the 3-month Treasury bill yield is at level of 4.03 percent.

THE EXPECTATION OF AN INCREASE OF 50 BASE POINTS BY THE FED IS STRENGTHENED

Expectations that the United States Federal Reserve (Fed) will moderate interest rate hikes in light of these events are eroding the selling pressure in the markets.

While it is assumed that the Fed will raise interest rates by 75 basis points at its meeting next week, expectations of a 50 basis point increase in interest rates at the December meeting continue to strengthen. The Fed is forecast to raise interest rates by 50 basis points with a 58 percent chance and 75 basis points with a 33 percent chance in December.

MIXED US EXCHANGES

On the other hand, it was reported that the acquisition of the social media company Twitter by Tesla and SpaceX CEO Elon Musk for $44 billion has been completed.

While a mixed course was followed in the New York stock market yesterday with these developments, the S&P 500 Index lost 0.61 percent, the Nasdaq Index lost 1.63 percent and the Dow Jones Industrial Average gained 0. .61 percent. US index futures contracts started the new day lower.

ECB DECISION OBSERVED IN EUROPE

On the European side, while eyes were on the European Central Bank’s (ECB) monetary policy decisions, the bank raised three main policy rates by 75 basis points to the highest level since 2009.

In the Bank’s statement, it was noted that there was a significant monetary tightening with this increase, and it was indicated that the Board will continue to make its decisions from meeting to meeting in accordance with inflation and the direction of the economy.

The statement said TLTRO III operations will also be scaled back and interest rates here will change on November 23, with inflation expected to remain at these levels for some time.

ECB President Christine Lagarde, in a statement after the meeting, said the bank will continue to raise interest rates, but the size of the rate increase will be determined from meeting to meeting.

Lagarde, despite persistent questions from members of the press, gave no hint as to the magnitude of the rate hike at the next meeting, while European media reported that three members voted 50 basis points.

While the DAX 40 Index rose 0.12% in Germany, the FTSE 100 Index rose 0.25% in Germany and the FTSE MIB Index rose 0.90% in Italy, the CAC 40 Index fell 0.51 % in France. Index futures contracts in Europe started the new day with a decline.

ASIAN STOCK EXCHANGES

While Asian stock markets followed a sell-oriented course on the new day, the Bank of Japan (BoJ) did not change interest rates or monetary policy. Although the Bank kept the policy rate at minus 0.1 percent, it revised upwards its inflation expectations for fiscal years 2022-2024.

The BoJ, which made the aforementioned decision unanimously, stated that it will continue to buy an unlimited amount of government bonds and exchange-traded funds (ETFs) of 12 trillion yen annually and Japanese real estate investment trusts (J-REITs) of 180 billion yen annually.

“The slowdown in the global economy and rising inflation stemming from temporary factors” were cited as the reason for maintaining ultra-loose monetary policy at a time when concerns were mounting over a weakening yen and inflation was outpacing the Bank’s targets. .

On the other hand, in Japan, the economy will be subsidized with a package of 29 trillion yen ($198 billion) to fight inflation. It will be subsidized with 7 yen per kilowatt-hour for electricity costs and 30 yen per cubic meter for city gas consumption.

According to macroeconomic data announced in the country, the Tokyo Consumer Price Index (CPI) rose 3.5 percent annually in October, beating expectations, and the unemployment rate rose to 2.6 percent. hundred.

With these developments, Japan’s Nikkei 225 Index decreased 0.9%, China’s Shanghai Composite Index decreased 1.5%, Hong Kong’s Hang Seng Index decreased 3.1% and Korea’s Kospi of the South decreased by 0.9%.

THE HALF DAY TRANSACTION WILL BE DONE IN BORSA ISTANBUL

Domestically, the BIST 100 index ended the day at 3,934.52 points with a decrease of 1.06 percent, while the Stock Exchange will trade for half a day today for Republic Day on October 29.

On the other hand, the president of the Central Bank of the Republic of Turkey (CBRT) Şahap Kavcıoğlu yesterday announced the last Inflation Report of the year.

Kavcıoğlu stated that they raised the year-end inflation forecast for 2022 from 60.4 percent to 65.2 percent with a 4.8 point update, adding: “The midpoints of our inflation forecast range are 65.2 percent at the end of 2022, 22.3 percent at the end of 2023 and 2024. At the end of the year it corresponds to the level of 8.8 percent.” he said he.

The dollar/TL is trading at 18.6020 at the open of the interbank market today, after closing at 18.6008 flat yesterday.

Analysts pointed out that today they will follow the growth of the third quarter in Germany, the CPI for October and the intense flow of data, especially personal income and expenses in the US, and technically, the levels of 3,900 and 3,850 in The BIST 100 index is supported, 4 thousand points claimed to be in the resistance position.

The data to follow in the markets today will be the following:

• 11.00 Germany, GDP for the third quarter
• 12.00 Eurozone, consumer confidence index for October
• 15.00 Germany, CPI for October
• 15.30 USA, September personal income and personal expenses
• 17.00 US, pending home sales for September
• 17.00 USA, October University of Michigan Consumer Confidence Index (AA)