The election process in the USA, developments in the Middle East axis and continuing doubts about artificial intelligence spending continue to have an impact on asset prices. While investors question the sustainability of large investments made in the field of artificial intelligence, question marks remain regarding when these expenditures will contribute to the income and profitability of companies.
Accordingly, artificial intelligence and technology stocks came under selling pressure yesterday as company-based developments increased existing concerns.
After the US chip manufacturer Marvell Technology announced that it would acquire the optical network technologies company Lumentum with an enterprise value of approximately 115 billion dollars, entirely through share swap, Marvell's shares fell by 12.72 percent and Lumentum's shares fell by 18.59 percent.
Oracle's shares also lost 8.76 percent after the company announced that it plans to issue $10 billion in stocks and $10 billion in bonds to finance its artificial intelligence investments.
Analysts noted that concerns about the demand outlook in the semiconductor industry and question marks regarding the financing of high-amount capital expenditures, as well as the expectation of re-tightening in global interest rates, triggered the declines.
Following macroeconomic data indicating that inflationary pressures may continue in the USA last week, the manufacturing industry Purchasing Managers Index (PMI) data announced yesterday revealed that growth in the sector has accelerated. The Institute for Supply Management's (ISM) manufacturing industry PMI rose to 55.5 in October.
The fact that economic activity remains strong strengthens expectations that the US Federal Reserve (Fed) may adopt a more hawkish stance in monetary policy. According to the pricing in money markets, the probability that the Fed will increase interest rates in December has increased to 75 percent.
In this regard, the data on the labor market to be heard throughout the week, especially the non-farm employment data to be announced on Friday in the USA, and the verbal guidance of Fed Vice President Michelle Bowman are in the focus of investors.
Post-election Iran message from Trump
In addition to these developments, efforts to end the tension in the Middle East attract attention. The news flow that US President Donald Trump said "no" to attacking Iran after the elections contributed to the decrease in the war premium in the markets.
On the other hand, US Vice President JD Vance said that some progress has been made with Iran and that they are quite optimistic about the possibility of reaching a compromise through negotiations.
Optimism that peace could be achieved in the Middle East triggered the decline in oil prices.
On the corporate side, Apple, one of the US technology giants, published its balance sheet for the quarterly period. Accordingly, the company's net sales increased by approximately 12 percent annually during this period, reaching 114.5 billion dollars. Apple's net sales were recorded as 102.5 billion dollars in the same period last year.
The company's net profit increased by 12 percent in the same period, reaching 30.7 billion dollars. Apple announced a net profit of $27.5 billion in the same period last year. The company's profit per share increased from $1.85 to $2.10 during this period.
With these developments, the US 10-year bond interest continues to hover around 4.90 percent, while the dollar index remains horizontal at 101.8.
The depreciation in risky assets due to artificial intelligence concerns, the need for liquidity due to the negative effects of the war in the Middle East, and hawkish forecasts for central banks continue to pressure gold.
The ounce price of gold, which rose yesterday with reaction buying, found buyers at 3 thousand 922 dollars with a 0.6 percent decrease on the new day. The barrel of January delivery Brent oil is trading at $105.2 with an increase of 0.4 percent.
With these developments, the S&P 500 index in the New York Stock Exchange decreased by 0.51 percent, the Nasdaq index decreased by 1.07 percent, and the Dow Jones index increased by 0.41 percent. Index futures contracts in the USA started the day mixed.
Risk appetite increased in European stock markets with the decrease in energy costs
European stock markets were positive yesterday as the sharp decline in oil prices reduced inflation risks. Diplomatic efforts in the Middle East increased optimism that peace could be achieved in the region, contributing to an increase in risk appetite in Europe.
The decline in energy costs had a positive impact on airlines and tourism companies. Accordingly, Air France-KLM shares gained 4.8 percent, IAG shares gained 3.8 percent and Ryanair shares gained 5 percent.
On the other hand, US President Donald Trump's special representative Steve Witkoff, in his statement on his social media account, stated that working-level talks will be held between Russia and Ukraine in Abu Dhabi, the capital of the United Arab Emirates (UAE), on November 10-11, under the mediation of his country.
Witkoff stated that the talks will focus on post-war security arrangements, de-escalation, humanitarian aid efforts and next steps towards peace.
Meanwhile, high school students in France, who did not find the government's commitments sufficient, resumed their actions of besieging schools in many parts of the country. According to local media, hundreds of high school students protested and blocked school entrances in the capital Paris, as well as in the cities of Marseille, Toulouse, Rennes and Lyon.
With these developments, the FTSE 100 index in England increased by 0.29 percent, the FTSE MIB 30 index in Italy increased by 0.90 percent, the DAX 40 index in Germany increased by 0.63 percent and the CAC 40 index in France increased by 0.98 percent. Index futures contracts in Europe started the day negatively.
Asian stock markets remain negative except Hong Kong
While a sell-off trend is observed on the Asian side, except for Hong Kong, concerns about current artificial intelligence expenditures come to the fore in pricing.
While the markets in Japan are closed today due to a holiday, deep losses in the stocks of South Korea-based semiconductor companies are noteworthy.
In South Korea, technology company LG Electronics shares fell 6.6 percent, semiconductor company SK Hynix fell 6 percent and Samsung Electronics shares fell 4.5 percent.
On the other hand, financial support measures were announced in China to support stock markets and strengthen investor confidence.
Analysts stated that these steps were in the nature of support measures for capital markets rather than a large-scale fiscal stimulus package covering the entire economy.
Accordingly, the People's Bank of China (PBOC) stated in its statement yesterday that swap transactions will be carried out with financial institutions and that these transactions can inject more than 100 billion yuan ($15 billion) into the stock market. In addition, local media reported that the China Securities Regulatory Commission (CSRC) is examining plans to relax collateral rules to increase liquidity.
With these developments, near the closing, the Shanghai composite index in China decreased by 0.8 percent, the Kospi index in South Korea decreased by 3.9 percent, and the Hang Seng index in Hong Kong increased by 0.5 percent.
Domestically, all eyes are on inflation data
BIST 100 index at Borsa Istanbul, which followed a buying-oriented trend yesterday, closed the day at 10,961.67 points, gaining 1.88 percent in value.
The December futures contract based on the BIST 30 index in the Borsa Istanbul Futures and Options Market (VIOP) fell by 0.18 percent in the evening session last night compared to the normal session closing.
On the other hand, the October inflation data to be announced today in the country is in the focus of investors. Economists participating in the AA Finance Inflation Expectations Survey estimate that the Consumer Price Index (CPI) will increase by 2.20 percent in October.
While Dollar/TL closed yesterday at 49.9700, today it is traded at 49.9970 at the opening of the interbank market, 0.1 percent above the previous closing.
Analysts stated that inflation data in the country and JOLTS job vacancies in the USA, factory orders and durable goods orders will be followed abroad today, and noted that technically, 11,100 and 11,200 points in the BIST 100 index are in a resistance position, while 10,900 and 10,700 points are in a support position.
The data to follow in the markets today are as follows:
10.00 Türkiye, October Consumer Price Index (CPI)
10.00 Türkiye, October Domestic Producer Price Index (D-PPI)
18.00 USA, September JOLTS job openings
18.00 USA, September factory orders
18.00 USA, September durable goods orders
Markets will be closed in Japan
