"Entering the Year 2026: Market Trends and Sector Analysis"

Market Developments and General Analysis

As we say hello to the year 2026 on this first trading day, US indices closed higher, ending the recent streak of declines. Technology stocks and the semiconductor sector stood out, while the positive outlook in industrial and defense stocks supported the Dow Jones. However, weak signals from giants like Apple, Microsoft, and Amazon limited the rise in the S&P 500 and Nasdaq.

Recovery in Small-Cap Stocks

The Russell 2000 index, representing small-cap firms, also showed a noticeable recovery. As we reached the end of 2025 without observing a year-end rally, the direction of global markets in 2026 seems to depend on monetary policies and the trend of macro data.

Monthly Data Calendar and Expectations

This week, the data calendar in the US is getting busy. The process will begin with the ISM manufacturing PMI data. Additionally, the ADP private sector employment, JOLTS job openings, and non-farm payroll data will also be closely monitored by investors.

Fed's Interest Rate Cut Expectations

On the Fed front, it is anticipated that data regarding the employment market will be decisive for interest rate cut expectations. A weak employment report could support a rate cut for the second half of the year, while strong data might delay these expectations.

Geopolitical Risks and Their Impact on Markets

The operation conducted by the US towards Venezuela is another development that has increased the risk premium. However, market reactions have so far remained limited. The energy markets also have not experienced significant volatility in the short term; crude oil futures are trading down nearly 1%, while gold and silver prices are showing upward reactions.

Developments in Asian Markets

In Asian markets, a buying trend is observed in Japan, China, and Hong Kong. Statements from the Bank of Japan indicate that the possibility of tightening monetary policy is on the agenda.

Turkey Markets and Inflation Data

Domestically, the significant agenda item for the week is the December inflation data. Monthly inflation is expected to be around 1%. This data could indicate an annual inflation trend around 31%, potentially maintaining the disinflation trend.

Investment Strategies and Stocks

The BIST 100 index in Borsa Istanbul made a strong start led by bank stocks, and the technical outlook has developed positively. Furthermore, with the ongoing interest rate cut process by the Central Bank of Turkey (TCMB), a downward trend in bond yields is being observed. The weak performance of the Turkish Lira against the global dollar is noteworthy.

As we enter the year 2026, it is essential to consider the impact of developments both domestically and internationally on pricing. Inflation data and the TCMB's stance on policy hold critical importance for investors.