Global markets are finding strength from improving balance sheets

While the potential impact of the US tariffs on the global economy continues to be a source of uncertainty, corporate and bank profitability, which largely exceeded expectations during the balance sheet period, significantly increased risk appetite in equity markets.

During the earnings period that began at the beginning of the week, the second-quarter financial results of major US banks indicated that the national economy remains strong. The performances of JPMorgan Chase, Wells Fargo, Citigroup, Bank of America, Morgan Stanley, and Goldman Sachs were particularly notable for their rising revenue and profitability figures.

Analysts stated that this positive outlook in the US banking sector indicates that consumer spending and commercial activities remain vibrant, and noted that the increase in revenues, particularly from investment banking and asset management units, indicates that financial markets are on a strong track.

The better-than-expected earnings figures were also reflected in stock prices. Yesterday, the S&P 500 and Nasdaq indices closed at record highs on the New York Stock Exchange in the US.

Pressure on Fed Chair Powell to cut interest rates is increasing

On the other hand, US President Donald Trump continued his criticism of Fed Chair Jerome Powell, whom he described as "too late" for being late in reducing interest rates.

Trump tweeted, "Great numbers," yesterday after stronger-than-expected retail sales data and a decline in unemployment claims. He also called on Fed Chair Powell to lower interest rates.

Powell also responded to questions about the Fed building renovation project via letter from Russell Vought, Director of the White House Office of Management and Budget (OMB). In his letter, Powell stated that information about the building renovation project was added to the Fed's website for transparency purposes and that the information supported his testimony before the U.S. Senate Banking, Housing and Urban Affairs Committee on June 25.

Powell stated that they take seriously the responsibility of using public resources in the best possible way and emphasized that the project has been meticulously monitored since its approval in 2017.

Powell emphasized that the project is progressing in accordance with the plan approved by the National Capital Planning Commission, noting that no elements have been added to the plan other than a few design changes made to simplify construction and prevent further delays or cost increases.

"Cautious" messages from Fed officials

Furthermore, as the inflationary impact of the tariffs begins to become apparent, attention is turning to the Fed's next steps. Yesterday, Fed officials issued cautious messages about interest rate cuts.

Fed Board Member Adriana Kugler stated that inflation is running above the 2 percent target and is facing upward pressure from tariffs.

Kugler stated that he thinks inflation will rise further as the effects of tariffs increase for the rest of the year, saying, "I think it is appropriate to keep our policy rate at the current level for a while longer."

San Francisco Fed President Mary Daly also said there was still work to be done on inflation, but that they shouldn't wait until the inflation target is reached to cut interest rates. She said two rate cuts this year would be reasonable.

In macroeconomic data, US retail sales rose 0.6 percent in June, exceeding expectations. The number of first-time unemployment benefit applicants in the country decreased by 7,000 in the week ending July 12 compared to the previous week, reaching 221,000. The number of unemployment benefit applications, which has declined for the fifth consecutive week and reached a three-month low, also fell short of market expectations.

In the US, the import price index increased by 0.1 percent on a monthly basis in June, while the export price index increased by 0.5 percent.

Three bills approved in the US

The US House of Representatives has approved three bills related to digital assets as part of its efforts to make the country the "crypto capital of the planet."

The "Digital Asset Market Clarity Bill," known as CLARITY, passed the House of Representatives by a vote of 294 to 134. The bill aims to address common regulatory uncertainties surrounding digital assets and establish clear rules for the sector. The bill aims to encourage growth in the US, while also improving consumer protection and making it easier for crypto companies to operate in the US.

The "National Innovation Guidance and Establishment for U.S. Stablecoins Act," known as GENIUS, passed the House of Representatives with a 308-122 vote. The bill aims to establish a federal regulatory framework for stablecoins and increase transparency and accountability in the stablecoin market.

The "Anti-CBDC" bill, which aims to block the issuance of central bank digital currencies (CBDCs), also passed the House of Representatives by a vote of 219 to 210. The bill prohibits the Fed from offering CBDC directly to individuals or issuing CBDC indirectly through financial institutions.

The bill, which defines financial privacy as a constitutional right, emphasizes that CBDCs can be used to monitor individuals' spending habits, political donations, or personal financial decisions.

Dollar index remains strong

In light of these developments, the US 10-year bond yield fell to 4.44 percent.

With the increasing possibility that the Fed will maintain its cautious stance, the dollar index continues to stay near 99 levels, while the price of an ounce of gold, which fell 0.3 percent to $3,339 yesterday, continues its decline and is currently at $3,335.

The price of a barrel of Brent crude oil is trading at $69, up 0.2 percent.

On the corporate side, Taiwan Semiconductor Manufacturing Company (TSMC), a major global semiconductor manufacturer, increased its net profit by 60.7 percent in the second quarter of 2025 compared to the same period last year. TSMC's net profit rose by approximately $13.5 billion in the second quarter of this year. The company's US-traded shares rose 3.4 percent yesterday.

On the New York Stock Exchange yesterday, the S&P 500 index rose 0.54 percent, the Nasdaq index rose 0.74 percent, and the Dow Jones Industrial Average rose 0.52 percent. Index futures contracts in the US opened the new day on a positive note.

European stock markets remained positive

While European stock markets followed a buying-heavy trend yesterday due to optimism about the balance sheet period and rising expectations for a trade agreement with the US, the current account balance data to be released in the Eurozone today became the focus of investors.

While making statements regarding his country's possible trade agreements, President Trump said that a new trade agreement with India is very close and that a similar agreement with the European Union (EU) seems possible.

Meanwhile, the German government deemed the EU Commission's plan to increase the EU's budget for the 2028-2034 period to €2 trillion "unacceptable." In a written statement signed by government spokesman Stefan Kornelius, the German government criticized the EU Commission's budget plans.

According to data released yesterday, the Eurozone's annual Consumer Price Index (CPI), which was 1.9 percent in May, reached 2 percent in June. Month-on-month, the CPI was 0.3 percent in June. Market expectations had been for annual inflation to be 1.9 percent year-on-year and 0.3 percent month-on-month in June.

The Eurozone had a foreign trade surplus of 16.2 billion euros in May.

Yesterday, the FTSE 100 index in the UK gained 0.52 percent, the DAX 40 index in Germany gained 1.51 percent, the FTSE MIB 30 index in Italy gained 0.92 percent, and the CAC 40 index in France gained 1.29 percent. Index futures contracts in Europe opened the day positively.

Asian stock markets are mixed

While Asia is experiencing a mixed trend, persistent inflation in Japan is making pricing difficult in the region's markets. The country's Consumer Price Index (CPI) rose by 0.1 percent month-over-month in June and 3.3 percent year-over-year. The core CPI also rose by 3.3 percent.

Meanwhile, Japanese Finance Minister Katsunobu Kato called for caution against excessive volatility in exchange rates in a statement today.

Additionally, the country will hold Consultative Assembly elections on July 20.

Meanwhile, news regarding the trade agreement between China and the US is being closely monitored. Chinese Commerce Minister Wang Wentao stated that his country wants to restore trade ties with the US to a healthy and sustainable state of development.

With these developments, the Nikkei 225 index in Japan and the Kospi index in South Korea fell 0.3 percent and 0.6 percent, respectively, nearing the close, while the Hang Seng index in Hong Kong rose 0.7 percent and the Shanghai Composite index in China rose 0.3 percent.

The index contract on VIOP showed a limited increase in the evening session.

Following a buying-heavy trend yesterday, the BIST 100 index on the Borsa Istanbul closed the day with a 2.46% gain at 10,370.80 points. The August futures contract based on the BIST 30 index on the Borsa Istanbul Futures and Options Market (VIOP) traded at 12,051.00 points in yesterday evening's session, a slight increase compared to the regular session close.

USD/TRY closed at 40.2870 yesterday with a 0.1 percent increase, and is being traded at 40.3730 today with a 0.2 percent increase at the opening of the interbank market.

Analysts stated that the weekly money and banking statistics in Turkey, the Producer Price Index (PPI) in Germany, and the intensive data agenda in the US will be followed today, and noted that from a technical perspective, the 10,500 and 10,600 levels in the BIST 100 index are resistance, while 10,300 and 10,200 points are support.

Here are the data to follow in the markets today:

09.00 Germany, June Producer Price Index (PPI)

11.00 Eurozone current account balance for May

14.30 Türkiye, weekly money and banking statistics

3:30 PM US building permits for June

3:30 PM US June housing starts

17.00 USA, July University of Michigan consumer confidence index

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