Fed expectations and economic data boost optimism in global markets
The U.S. economy's 3 percent growth in the second quarter has drawn a positive response from markets. While the Fed's future moves are awaited with curiosity, macroeconomic data are limiting recession concerns. As stock indices rise globally, China's cut to reserve requirement ratios has also created a positive impact on Asian markets.
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In global markets, the U.S. economy's 3 percent growth in the second quarter has led to a positive trend in the markets. The forecast that the U.S. Federal Reserve (Fed) could end its fight against inflation with a "soft landing" is boosting investor morale. However, concerns about a recession in the global fight against inflation still persist.
According to the latest data, the personal consumption expenditures price index rose by 2.5 percent in the second quarter, while the core personal consumption expenditures price index was recorded at 2.8 percent. The number of people filing for unemployment benefits for the first time also fell to 218 thousand in the week ending September 21, coming in below market expectations. Analysts state that the decline in unemployment benefit claims indicates stability in the labor market.
While statements from Fed officials are being closely watched, Fed Chair Jerome Powell's lack of any assessment regarding monetary policy has increased uncertainty. On the other hand, Fed Governor Lisa Cook's support for a 50-basis-point interest rate cut has resonated in the markets.
Expectations for a 50-basis-point cut by the Fed in November remain as strong as they were in previous days. On the corporate side, chipmaker Micron Technology's revenue forecast coming in above expectations led to a 14.7 percent gain in the company's shares.
Yesterday, the Dow Jones index rose 0.62 percent, the S&P 500 index 0.40 percent, and the Nasdaq index 0.60 percent, with the S&P 500 index achieving its all-time high close. A buying-weighted trend was also observed in European markets; the DAX 40 index broke an intraday record and made its all-time high close.
In Asian markets, the Chinese Central Bank's 50-basis-point cut to reserve requirement ratios created a positive impact on the markets. This decision is expected to provide approximately 140 billion dollars of liquidity to the market.
Investors will closely follow data to be released today in the U.S., such as personal income and expenditures, wholesale inventories, and the University of Michigan consumer sentiment index. Eyes in the markets have turned to the impact of this data on the decisions the Fed will make regarding monetary policy.
Additionally, on Borsa Istanbul, the BIST 100 index continues to trade at 9,829.19 points, down 0.62 percent from the previous day's close, while the dollar/TL is trading at the 34.1770 level. Data to be released domestically today, such as the foreign trade balance and the economic confidence index, will also be important.
Data to be followed in the markets:
- 10:00 Turkey, August foreign trade balance
- 10:00 Turkey, September economic confidence index
- 10:55 Germany, September unemployment rate
- 12:00 Eurozone, September consumer confidence index
- 12:00 Eurozone, September economic confidence index
- 15:30 U.S., August personal income and expenditures
- 15:30 U.S., August wholesale inventories
- 15:30 U.S., August core personal consumption expenditures
- 17:00 U.S., September University of Michigan consumer sentiment index