November 19: Preparations You Need to Make Before the Market

Market Developments and Expectations

In global markets, selling waves spearheaded by technology stocks continue to create a negative atmosphere on Wall Street, compounded by weak signals from the U.S. labor market. U.S. indices have shown a selling trend over the last four days, while futures are preparing for a weak start to the new day.

Profit Sales in Artificial Intelligence Stocks

Concerns over high valuations for artificial intelligence companies and intense profit sales occurring ahead of Nvidia's financial results are weakening investors' risk appetite. The high capital requirements demanded by large technology and AI investments, along with liquidity and transparency issues in the private credit market, are creating greater stress in the markets.

Fed's Interest Rate Policies and Market Reactions

After the Fed's meeting in October, which saw a second consecutive interest rate cut, the S&P 500 and Nasdaq indices reached peak levels. However, Fed Chairman Jerome Powell's remark that a third cut in the December meeting is not guaranteed has dampened market expectations. Since then, the S&P 500 has lost about 3% in value, while losses in technology and AI-focused stocks have reached up to 10%.

Analysis on Labor Market and Consumer Spending

U.S. employment data is being closely monitored. Weekly jobless claims, which were previously unavailable due to the government shutdown, have started to be published again. The lack of significant increase in initial claims indicates that disruptions in the labor market have not yet become visible. However, the impact of low employment and high borrowing costs is creating a weak picture in the housing sector as well.

Assessing the Market Situation

The BIST 100 index closed yesterday with a limited increase of 0.3%, at the level of 10,728. The index is moving within the range of 10,600 - 10,800, continuing its attempts towards 10,800. As long as it remains above the level of 10,700, the short-term outlook maintains its optimism. Additionally, tracking technically strong stocks is also crucial for investors.

Situation in Gold and Bond Markets

Spot gold, after falling below 4,000 dollars, is trading around the 4,075 dollar level during the day. The decline of Turkey’s 5-year CDS premium to around 246 indicates an improvement in the risk perception in the markets.

Although the data flow appears calm for today, developments closely monitored by investors will continue to influence market directions.