Global markets are on a positive note as recession concerns ease following the decline in unemployment claims in the US yesterday.
A positive trend is observed in stock markets as recession concerns in the US economy, which caused selling pressure at the beginning of the week, have diminished due to the increase in unemployment benefit applications data announced yesterday.
The number of people filing for first-time unemployment benefits in the U.S. fell to 233,000 in the week ending Aug. 3, below market expectations. The number of people filing for first-time unemployment benefits in the country fell by 17,000 last week compared to the previous week.
Analysts said the decline in jobless claims provided some relief about the state of the labor market after weak U.S. employment data last week raised concerns about a recession.
Data released last week raised concerns that the Fed had waited too long to cut interest rates, while also putting the bank’s “soft landing” scenarios at risk.
Analysts said that yesterday’s weekly unemployment claims reassured the markets, but the inflation data to be released in the US next week is also of great importance for the direction of the markets.
While the statements of the US Central Bank (Fed) officials are also being followed, Richmond Fed President Thomas Barkin stated that the cooling in the labor market is due to the slowdown in hiring rather than an increase in layoffs and that it allows the Bank to determine its next move. Barkin also stated that he is quite optimistic that they will see good indicators on the inflation side in the next few months.
Chicago Fed President Austan Goolsbee also noted that the Fed’s job is not to respond to stock market routs or political assessments. The question is whether the labor market will continue to deteriorate and that they need to see more employment data, Goolsbee said, noting that the U.S. economy is returning to more normal conditions.
Pricing in money markets is looking set to see the Fed cut interest rates in September.
With these developments, the US 10-year bond interest, which had risen above 4 percent, is now at 3.98 percent.
The dollar index decreased by 0.1 percent to 103.2, the ounce price of gold decreased by 0.3 percent to 2,421 dollars, and the barrel price of Brent oil increased by 0.3 percent to 78.9 dollars.
The New York Stock Exchange ended the day higher as recession concerns eased following a decline in unemployment benefits in the United States.
The ongoing earnings season is also in investors’ focus. Eli Lilly shares gained 9.5% after its financial results beat expectations and the company raised its revenue forecast.
Warner Bros. Discovery shares fell nearly 9 percent after losses on its TV assets raised concerns about its traditional broadcasting business.
With these developments, the Dow Jones index gained 1.76 percent, the S&P 500 index gained 2.30 percent and the Nasdaq index gained 2.86 percent. Index futures contracts in the US also started the day with an increase
European stock markets followed a negative trend yesterday, except for Germany.
Analysts said that mixed signals from macroeconomic data released in Europe continue to cause concerns about economic activity in the region, and that the European Central Bank (ECB) is likely to cut interest rates next month.
With these developments, the DAX 40 index in Germany increased by 0.37 percent, the FTSE 100 index in England decreased by 0.27 percent, the CAC 40 index in France decreased by 0.26 percent and the FTSE MIB 30 index in Italy decreased by 0.28 percent. Index futures contracts in Europe started the day with an increase. The euro/dollar parity is moving sideways at 1.0920 levels.
The buying-heavy trend on the New York Stock Exchange carried over to Asia on the new day, while easing recession concerns in the US supported the dollar against the Japanese yen.
The dollar/yen parity is down 0.1 percent to 147.1.
On the other hand, the positive inflation data announced in China was another factor supporting Asian markets. The Consumer Price Index (CPI) in China exceeded expectations by increasing by 0.5 percent on an annual basis in July. The country’s CPI had increased by 0.2 percent on an annual basis in June.
As of the close, Japan’s Nikkei 225 index rose 0.9 percent, South Korea’s Kospi index rose 1.1 percent, Hong Kong’s Hang Seng index rose 1.8 percent and China’s Shanghai composite index rose 0.1 percent.
BIST 100 index in Borsa Istanbul, which was mostly buying in the country yesterday, completed the day at 10,098.50 points, gaining 0.74 percent compared to the previous close.
USD/TL, which closed at 33.4914 with a 0.1 percent increase yesterday, is being traded at 33.5540 with a 0.2 percent increase at the opening of the interbank market today.
Analysts stated that industrial production data in Turkey and consumer price index data in Germany will be followed today, and noted that technically, 10,200 and 10,300 points are resistance in the BIST 100 index, while 9,800 and 9,750 points are support.
