Global markets start new week positive due to tech firms’ strong earnings

By Burhan Sansarlioglu and Emir Yildirim

ISTANBUL (AA) - Global markets started the new week on a positive note as the strong earnings by US tech firms fueled the upward momentum, reigniting optimism around sustainable growth for tech giants amid concerns over excessive spending on artificial intelligence (AI).

As tensions between China and the US ease, markets are expected to remain optimistic, though the federal government shutdown in the US means no non-farm payroll data will be released this week.

US President Donald Trump blames the government shutdown on Democrats, while all eyes turned to the ISM manufacturing Purchasing Managers’ Index (PMI) and ADP employment report to be releases this week.

Meanwhile, China will reportedly lift restrictions on rare earth exports and halt exports of chemicals used in fentanyl production to North America as per a new agreement reached between Trump and Chinese President Xi Jinping, according to the White House.

At the same time, some Fed officials opposed rate cuts, causing investors to act with caution, while the likelihood of a Fed rate cut in December is at 70%, according to money market estimates.

The US 10-year bond is at 4.09% and the US dollar index is down 0.1% to 99.7 on Monday, while gold is up 0.2% at $4,015 per ounce, and the Brent crude oil is up 0.9% to $64.6 per barrel after the OPEC agreed to halt production increases in January-March next year.

Last Friday, the New York stock market was positive as tech giants posted their balance sheets. Amazon’s net sales rose 13% in the third quarter, its net profits surged 39%, and its shares gained 10%.

Apple’s net sales rose 8% in July–September, while its net profit surged 86%, but its shares ended Friday with a slight loss despite better-than-expected profits and revenues.

Netflix shares rose 3% after an announcement of a 10-for-one stock split, while Chevron gained 3% and ExxonMobil reported lower-than-expected profits.

Following these changes, the Dow Jones climbed 0.09%, the S&P 500 0.26%, and the Nasdaq 0.61% on Friday, while American futures started Monday in green.

As for Europe, the Bank of England (BoE) monetary policy decision is under the spotlight this week, as the inflationary pressures in the UK continue. The bank is expected to keep its rate unchanged, while concerns over the government’s budget negotiations cause added pressure on its stock market.

Meanwhile, the eurozone’s annual inflation fell to 2.1% in October versus 2.2% in September, while last month’s monthly inflation was 0.2% — at the same time, core inflation rose from 2.3% to 2.4%, which is stubbornly high, as analysts said.

The ongoing political uncertainty in France is expected to be the determining factor in the European markets moving forward.

France’s CAC 40 fell 0.44%, the FTSE MIB 30 0.06%, the DAX 30 0.67%, and the FTSE 100 0.44% on Friday.

New York’s positive trend was reflected in Asia on Monday, while China’s macroeconomic data continues to be a source of concern over the country’s economy.

China’s RatingDog October manufacturing PMI fell from 51.2 to 50.6 due to the decline in export orders.

Analysts say Beijing is expected to announce more incentives.

Meanwhile, South Korea’s Kospi Index tested a record of 4,216.93 points as South Korean chipmakers’ shares rose.

Near the close, the Kospi Index rose 2.3%, the Shanghai Composite Index 0.6%, and the Hang Seng Index 0.6%, while the Japanese stock market is closed due to a holiday.