Index Gains: Interest Rate Cuts Stimulate Investments

The Impact of Interest Rate Cuts on Global Markets

In global markets, the balanced messages from the Federal Reserve (Fed) create a positive sentiment, while concerns about artificial intelligence continue to put pressure on technology stocks. Borsa Istanbul, on the other hand, rose with an optimistic atmosphere following the Central Bank of the Republic of Turkey's (CBRT) 150 basis point interest rate cut. Attention will turn to inflation and employment data from the US in the coming week.

Notable Developments from Last Week

• The Fed cut the policy interest rate by 25 basis points. This created a positive atmosphere in the markets.
• The CBRT cut the policy interest rate by 150 basis points to 38%. This development was also positively received in the markets.
• According to the CBRT's survey, the 12-month inflation expectation decreased from 23.49% to 23.25%.
• In Turkey, industrial production fell by 0.8% month-on-month, and year-on-year it declined from 3% to 2.2%. (Negative)
• Bitcoin's value increased by 1.2%, while the total value of crypto assets rose by 1.3%.

New Opportunities for Investors

The start of a lasting decline in interest rates has led investors to wonder which companies will benefit more in this new environment. With interest rates decreasing from the high levels at the beginning of the year to 38%, the process of exiting the high-interest rate effect has gained momentum.

During this process, companies with a manageable Net Debt/EBITDA ratio, producing positive operational EBITDA and maintaining free cash flow are coming to the forefront. The fact that the balance sheet quality of these stocks, which were suppressed during the high-interest period, has not deteriorated indicates strong resilience.

Market Forecasts and Company Developments

• Paramount Skydance (PSKY) made a competing offer following Netflix's agreement with Warner Bros.
• Disney (DIS) signed a $1 billion deal with OpenAI.
• Pegasus (PGSUS) acquired the entirety of Smartwings in Czechia.
• Anadolu Isuzu (ASUZU) acquired a stake in a vehicle manufacturer in Uzbekistan.
• BlackRock filed a registration statement with the SEC for an Ethereum ETF.

Investor Sentiment: Fear and Greed Index

At the end of our weekly bulletin, let's convey some significant changes observed in certain company stocks:

• Molina Healthcare (9.29% increase) and CarrefourSA (17.89% increase) stock prices stood out.
• Bahadır Kimya (8.86% decrease) and Oracle (14.03% decrease) are on investors' radar.

All eyes will be on Turkey's budget balance and US non-farm payroll data for the upcoming week. These data, which shape investments, will determine the direction of the markets.