Entering 2026: Market Trends and Sectoral Analysis

Market Developments and General Analysis

As we welcome the year 2026 on this first trading day, US indices closed higher, ending the recent series 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, representative of small-cap firms, also showed a distinct recovery. Following the year-end rally, which was not observed by the end of 2025, the direction of global markets in 2026 seems to depend on the course of monetary policies and macro data.

Monthly Data Calendar and Expectations

This week, the data calendar is becoming busier in the US. The process will start with the release of the ISM manufacturing PMI data. Additionally, ADP private sector employment, JOLTS job openings, and non-farm payroll data will be closely monitored by investors.

Fed's Interest Rate Cut Expectations

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

Geopolitical Risks and Their Impact on Markets

The US operation against Venezuela is another development that has increased risk premiums. However, market reactions have remained limited for now. Energy markets also have not experienced significant short-term volatility; while crude oil futures are trending down nearly 1%, gold and silver prices are showing upward responses.

Developments in Asian Markets

In Asian stock 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, an important agenda item for the week is the December inflation data. Monthly inflation is expected to be around 1%. This data could point to an annual inflation rate of approximately 31% and may sustain the disinflation trend.

Investment Strategies and Stocks

The BIST 100 index in Borsa Istanbul started strong, led by bank stocks, and the technical outlook has improved positively. Additionally, with the Central Bank of Turkey's interest rate cut process, a downward trend in bond yields is also being observed. The weak performance of the TL against the global dollar is noteworthy.

As we head into 2026, both domestic and international developments' impacts on pricing should be taken into account. Inflation data and the stance of the Central Bank of Turkey are of critical importance for investors.