As the “hawk” steps taken by central banks in the fight against inflation are approaching the end, recession concerns around the world are gaining strength day by day.
The fear that the banking crisis might affect pricing in the USA was also on the agenda again. The mixed signals in the macroeconomic data and the increase in the uncertainties regarding the monetary policy also increased the risk perception.
Shares of First Republic, one of the banks mentioned in the banking crisis in the USA, which published its balance sheet after the markets closed on Monday, lost nearly 50 percent of its value, while the New York stock market stopped the transactions of the bank’s shares for a while due to excessive volatility.
The news flow that First Republic is considering selling assets close to $100 billion was also influential in the course in question.
New home sales in the US rose 9.6 percent month-on-month to 683 thousand in March, exceeding expectations. The Conference Board Consumer Confidence Index in the country fell to 101.3 with a decrease of 2.7 points on a monthly basis in April, recording the lowest level in 9 months.
Analysts pointed out that the said data flow continued to give mixed signals, and stated that this situation caused the concerns of a “sudden stop” in the country’s economy to be voiced again.
Analysts stated that the expectations for the US Federal Reserve (Fed) to increase interest rates by 25 basis points next month in the pricing in the money markets remained strong, even though they decreased to 77 percent, and noted that the Bank’s predictions that it would end its “hawk” policies with this interest rate increase came to the fore.
On the other hand, Microsoft, which announced its balance sheet for the January-March period after the markets closed, increased its revenues by 7 percent to $52.9 billion, and its net profit increased by 9 percent to $18.3 billion.
Google’s parent company Alphabet also rose 3 percent to $69.8 billion in revenue during the same period, while its net profit fell to $15.1 billion.
Among the companies expected to announce their balance sheet today are companies such as META and Boeing.
With these developments, the S&P 500 index fell by 1.58 percent, the Dow Jones index by 1.02 percent and the Nasdaq index by 1.98 percent in the New York stock market yesterday. Index futures contracts in the USA started the new day with a rise with the company financial results of Microsoft and Alphabet.
While the European stock markets followed a sales-heavy course yesterday, excluding Germany, the statements of the European Central Bank (ECB) officials that they will continue to increase interest rates despite the increasing recession risk in the world support the risk perception.
ECB member Boris Vujcic stated in his statements yesterday that the bank has no choice but to increase interest rates, while question marks regarding the size of the Bank’s interest rate step next month continue to complicate pricing.
While it is considered certain that the ECB will increase interest rates by 25 basis points in the pricing in money markets, the probability of a 50 basis point increase in interest rates is at the level of 31 percent. The Bank’s projections that it will raise interest rates by a total of 100 basis points by the end of the year remain strong.
While DAX 40 index increased by 0.05 percent in Germany yesterday, FTSE 100 index decreased by 0.27 percent in England, CAC 40 index decreased by 0.56 percent in France and MIB 30 index decreased by 1.03 in Italy. Index futures contracts in Europe also started the new day with a decline.
While technology companies in Asia stand out as the main factors that eroded the downward trend, the news flow that the government may take new steps in the face of the slowdown in the Chinese economy supports the risk appetite, albeit to a limited extent.
While the Nikkei 225 index decreased by 0.7 percent in Japan near the closing, the Shanghai composite index in China fell by 0.2 percent, the Hang Seng index in Hong Kong by 1 percent and the Kospi index in South Korea by 0.1 percent.
BIST 100 index in Borsa Istanbul, which followed a sales-weighted course in the domestic market yesterday, finished the day at 4,891.01 points, 2.62 percent below the previous closing.
Dollar/TL is trading at 19.4210 at the opening of the interbank market today, after closing at 19.4246 with an increase of 0.1 percent yesterday.
Analysts stated that the data on durable goods orders, foreign trade deficit and wholesale stocks will be followed in the USA today, and noted that technically, the BIST 100 index 4,800 and 4,700 levels are support, 4,980 and 5,000 points are resistance.