Turkish Economy: Hot Money, Inflation, and Market Trends

The influx of hot money into Turkey led to a significant increase in the stock market and bonds, with expectations of interest rate cuts in the upcoming period.

### Turkey's Economic Outlook: Inflation, Interest Rates, and Market Trends
* 💸 In the period following the March elections, Turkish assets yielded returns in dollars by **1116% in the stock market** and **116% in private sector bonds**.
* 📉 The Turkish Lira has depreciated slightly, but remains below cumulative inflation since March, **effectively appreciating**.
* 🔥 Hot money inflow into Turkey has halted, with foreign investors starting to **sell bonds**.
* 📊 Vanguard predicts a potential **second wave of hot money inflow** if inflation decreases.
* 📈 Goldman Sachs and JP Morgan predict interest rate cuts in September or October, which could impact **various markets**.
* 🏦 Garanti Bank's strong balance sheet performance has supported the banking sector in the stock market.
* 📉 Inflation remains a key concern, with business leaders like **Abdullah Kiğı** highlighting its impact on **prices**.
* 🌐 Global factors, such as the Federal Reserve's expected interest rate cuts and geopolitical tensions, continue to influence **gold and silver prices**.

We have a customer from America whose bag is full of dollars. After the local elections following the March elections, there was a significant inflow of hot money into Turkey, meaning a short-term foreign capital inflow, especially in April and May. This led to a significant increase in the stock market and bonds during that period. From the March elections until now, you can see that Turkish assets have yielded returns in dollars by 1116% in the stock market and 116% in private sector bonds. Not bad at all. Now, the stock market is stagnant. There has been some depreciation in the Turkish Lira, but the depreciation in the Turkish Lira is actually well below the cumulative inflation from March, meaning the Turkish Lira has actually appreciated. How did this happen? Of course, it happened with the influx of hot money into Turkey. As I mentioned, there was a significant inflow of hot money into Turkey, but now in July, the hot money inflow has come to a halt. In fact, there has been an exit from bonds. We saw the data from last week; there were sales in bonds, foreigners started to sell. Now, in the upcoming period, there will be hot money influx again.

A Vanguard fund, one of the largest funds in the world, says that if inflation decreases, the second wave of hot money inflow to Turkey will start, and this will be the new major event in the upcoming period in Turkish markets. The new major event will be the decrease in inflation. When talking about the decrease in inflation, what he means is not a decrease in annual inflation due to base effects, but a decrease in monthly inflation. We will learn about June's inflation on Monday. As you know, the inflation announced at the beginning of July was below expectations, below 2%. Of course, I am talking about Turkish inflation, and it seemed like what this Vanguard manager said was happening as he wished. But on Monday, at the beginning of next week, we will likely see that July's inflation is still very high. This is highly likely because of Reuters' survey.

You see, the expectation is that monthly inflation, which fell below 2% last month, even approaching 1.5%, will rise again by 3.5%. Because at the beginning of July, you know, consecutive price increases due to special consumption tax came, which caused inflation to rise again in July. So, what was expected, what was desired, will not happen this month. We will look at the months ahead. By the way, starting from Wednesday, I resumed the 20.30 videos. Regular viewers may have noticed, I mentioned it before. I also took a short break on Monday and Tuesday at the beginning of the week, and now we have resumed the videos where we left off. On Monday, we will evaluate the inflation together. Inflation just doesn't drop, and Abdullah Kıı, you know, is one of the leading businessmen in Turkey's textile industry. Actually, his father established the family company. Now, the second generation is continuing. By the way, I have shared company stories; I will continue with weekend stories where I left off. And Abdullah Kıı, inflation is...

He is very complaining about not being able to fall in any way, this complaint is really amusing in its first part because Abdullah Klı is complaining about this. He used to go to the restaurants at Zorlu Center 2-3 days a week, but now he can't go because the prices have increased a lot. Let's move on from this, but he is complaining about the significant increase in suit prices, and he is very right about this. He says, We used to sell suits for 500 liras before. Now, the cheapest suit is between 3,000 and 5,000 liras. Many people cannot afford this. The situation is not good; inflation needs to decrease so that the Central Bank can start interest rate cuts. Additionally, Golden Sachs, which is an American bank, predicted that interest rate cuts would start in September. The representative of Goldman Sachs says, Clemens Grape thinks that the cuts will start in September. When we say September, it is only 2 months away. We will see if the Central Bank will start the cuts. But it's not just Goldman Sachs; JP Morgan, which is also one of the largest banks in America, its Turkey president Mustafa Bağrı openly stated that it won't be in September.

In October, it is believed that interest rate cuts will begin. If interest rate cuts start, we will see prices picking up again in markets, especially real estate and second-hand cars, which are currently stagnant. However, if the Central Bank continues with high interest rates for a long time, or even if they do not cut interest rates at all this year, and wait a few more months until 2020, then we will again see a further deepening of the real decline in prices in these markets. So, in the upcoming period, let's look at where the Turkish economy is heading; on the one hand, towards hot money, and secondly, inflation, as you can see, linked to the dollar. By the way, today it exceeded 33 again, currently at 33.13 in the interbank market. It suddenly accelerated today; we also see that it exceeded 33 in the Grand Bazaar and in the free market. Today, we were able to sell the dollar for 33.01 in the free market, and our euro selling price is 35.75 in the bazaar, and our buying price is 35.87. Let's move on to gold; we saw very sharp movements last week as it approached $2,500 an ounce, then it made a tremendous...

A winter realization came, it dropped below $2400, but as it drops, I mentioned that it would go down there and whenever there is such a sharp drop, buying always comes from the bottom. The direction of gold is upwards, the common opinion in the market. In the upcoming period, it is expected that the Federal Reserve, the American Central Bank, will start cutting interest rates. Meanwhile, geopolitical risks continue in the world, there are wars, central banks continue to buy gold. That's why when it drops like this, gold continues its path from where it left off, I said. Today, we see this once again, it reached $2423. Because today, after I published the video, the Federal Reserve, the American Central Bank, will announce the interest rate decision, and a dovish decision is expected to be announced, and it is expected that Powell, the head of the Federal Reserve, will also give dovish messages at the press conference today. Because the latest data came exactly as expected in America. In fact, some of them came below expectations. After this, there is a strong expectation in the market that interest rate cuts will begin in September. And today, the expectation that the Federal Reserve will confirm this caused gold to rise today, but not only this.

Today, gold is moving upwards. There is also a geopolitical development. In Tehran, the capital of Iran, Hamas's political leader Haniyye carried out an attack. Following this, concerns arose about a possible hot conflict between Israel and Iran again. In the meantime, Israel had also attacked Lebanon. There are concerns about sparking a war between Hezbollah and Israel. During such periods of concern, we know that there is a demand for gold and silver as safe havens. This is also one of the factors pushing up the price of gold today. In the closed market, the price of a gram of gold has again risen above 2,600 Turkish Liras as the price of gold goes up. Of course, as the dollar rises, we can buy a gram of gold today for 2,622 liras, and our selling price is approaching 2,600 liras for an ounce of gold. Silver had a sharp drop last week. Today, it again approached the threshold of 29 dollars, but at one point, as you know, it reached up to 32 dollars per ounce. There were critics under last week's video saying silver is rising, you said it will rise, look what happened. Silver is falling, they said. But remember, commodities are not like stocks.

These are not evaluated. Long-term instruments need to be looked at in the long term direction. When we look at the long-term direction, we see that both silver and gold have significantly benefited investors from the beginning of the year until today. In fact, there are already comments in the world media that there is currently a rally in gold and silver. I share the same opinion, and before the decision of the FED, there is also an increase in futures trading on American stock exchanges. By the way, yesterday Microsoft's balance sheet came a bit below expectations. Cloud revenues were below expectations. Currently, while I am recording this video, there is a decline in futures trading. This week, there are very critical balance sheets in America. Tomorrow, Meta, which I am correcting, Facebook's parent company Meta, will announce after the market closes today. After that, Apple and Amazon will announce their balance sheets tomorrow. If they exceed expectations, it will be beneficial for the American stock exchanges, but if they fall below expectations, it may have a negative impact like last week when Google and Tesla fell below expectations. However, the most critical balance sheet will be at the end of August for the American stock exchanges.

Nvidia's balance sheet to be announced. If Nvidia beats expectations again, the rally can continue. But if it falls below expectations for the first time in a while, we may see a significant drop. As you know in the American stock markets, as regular viewers of this channel know, in your investment account at Midas, one of the sponsors of this channel, you can invest with a transaction cost of $1.5 for these shares. In Turkey, Midas is under the supervision of the CMB (Capital Markets Board), and in America, the institutions it collaborates with are under the supervision of the relevant authorities. You can find the link to open a Midas investment account under the video description to invest. Let's move on to our stock market. The market continues to decline. Today, foreign markets were good, but it did not affect us. We started at 1065 today with a decrease of 0.31%. Yesterday, it had broken below 10,700 and the assassination of Haniye increased regional risks, bringing selling pressure to the market. It started negatively, reached the highest at 10,703 during the day, struggling to go above 10,700, and

At the low, it saw 10,560, closed at 10,638 - banks at 0.50%, industry at 0.28% down, but behind the positive of banks, there is the issue of Garanti Bank. Its balance sheet was good today. Other bank balances are coming in bad. Akbank had a bad start to the week. Yapı Kredi's profit is down by 38% compared to last year. It was also bad today, but Garanti Bank increased its profit by 22% in the second quarter, exceeding surprise expectations. At one point, its increase reached up to 56%, so Garanti's good performance today also supported the banks. It even prevented the market from falling further today. Also, HSBC's purchases in the afternoon were remarkable today. If it wasn't for HSBC's purchases, the market had dropped to around 10,565 by noon. Most likely, it would have gone down to 10,000. Borsa Istanbul was very negative in the morning, but then it recovered its losses. Here you see the largest buyer, HSP, with more than 2 billion 100 million Turkish lira. Bank of America also had more than 792 million Turkish lira. So, foreigners bought more today. İş Yatırım sold more than 1 billion 114 million Turkish lira today. Traders also sold 1 billion Turkish lira.

HSBC Garanti had more than one sale. THY Pegasus bought a new plane, and İş Yatırım sold Aselsan, Petkim, and Yapı Kredi to Garanti. Tacirler sold THY, Garanti, TAV, B Maş, and Coach Holding today. Now, at 10,700, there is a very critical point here. The stock exchange has its 50-day average, and since December 26th of last year, it has a support point from the rising trend. Throughout the day, if the stock exchange cannot move above this point, it is not advisable to be too optimistic. The support is at 15.00. Today, world stock exchanges were good, as I mentioned earlier, but it did not affect us. Now, the Fed's decision tonight will most likely not have a significant impact on us or the world stock exchanges tomorrow. Positive shares today were Garanti, Sasa, Kontrolmatik, Altınay, Yiğit Akü, Onur Teknoloji, Katmerciler, and Lojistik. Pacific Teknoloji, SDT, and Uzay also reached their peaks. On the other hand, Yeot Teknoloji and Efor Çay were negatively diverging. Once again, in situations like this, you know that Transportation and Tourism are negatively affected. The same goes for insurance.

In events like the Haniye assassination, it is negatively affected, but today insurance is the best sector because it dropped a lot in a few days. Last week, Turkey's insurance balance sheet was very bad, and after that, there were declines. Today, the public made a big purchase in the Turkish insurance, which also had a positive impact on other insurance shares, making insurance the best sector today. Besides Turkish Airlines, Akbank, Aselsan, Fonet, Petkim, Koç, Koza, Altın, Sabancı, Pegasus, Agrot, Mia Technology, Arçelik announced their balance sheets today, revealing a loss of 400 million lira in the second quarter, which had a negative impact. Fener approached 7% decrease, and Astor, which had money inflow today, includes shares like Garanti, Tüpraş, Edi, Bimaş, Sasa, Telekom, Pegasus, İşbank, Yapı Kredi Bankası, Altınay. Those with money outflow are Turkish Airlines, Arçelik, Akbank, Coca-Cola, Coca-Cola, Cooch Holding, Enerjisa, Emlak GYO, Efes, Halkbank, and Fonet. I will be here again at 8:30 in the evenings. See you tomorrow.

Dolar 33.10'u geçti | Borsa düştü ama yabancı hisse topladı | Altın yükseliyor

Barış Soydan

The Impact of Hot Money Inflow on the Turkish Economy

After the March elections in Turkey, there was a significant inflow of hot money, leading to a substantial increase in the stock market and bonds.

Turkish assets yielded high returns in dollars, with the Turkish Lira actually appreciating due to the hot money influx.

However, the hot money inflow has now halted, with an exit from bonds, but there is anticipation of a new influx if inflation decreases, according to Vanguard fund.

Uncertain Inflation Outlook and Its Impact on Businesses

Monthly inflation, initially expected to rise by 3.

5%, has been influenced by consecutive price increases due to special consumption tax.

The rising prices have led to complaints from businesses, such as Abdullah Kıı in Turkey's textile industry, who is struggling with significant price increases for suits.

American banks like Goldman Sachs and JP Morgan have conflicting predictions about the start of interest rate cuts in Turkey, adding to the uncertainty about the future inflation trend.

Potential Impact of Interest Rate Cuts on Markets and Currency

Potential interest rate cuts in October could revive stagnant real estate and second-hand car markets.

The Turkish economy is facing challenges related to hot money and inflation, with the value of the dollar and gold prices experiencing significant fluctuations.

The expected interest rate cuts by the Federal Reserve are likely to contribute to the upward trend of gold, influenced by geopolitical risks and central bank activities.

Gold and Silver Prices Surge Amid Geopolitical Tensions

Geopolitical developments in the Middle East, including attacks by Hamas's political leader in Tehran and conflict between Israel and Lebanon, are driving up concerns of a potential war, leading to increased demand for gold and silver as safe-haven assets.

The price of gold has risen above 2,600 Turkish Liras per gram, while silver is approaching $29 per ounce, following a recent sharp drop.

The rally in gold and silver is attributed to their long-term benefit to investors, as well as an increase in futures trading on American stock exchanges ahead of critical balance sheet announcements for major companies like Meta, Apple, and Amazon.

Nvidia's Upcoming Balance Sheet Announcement and Market Impact

Nvidia's balance sheet announcement will determine the direction of the stock rally.

A positive outcome could sustain the rally, while a below-expectations report may cause a significant drop.

The Borsa Istanbul market saw a decline, but Garanti Bank's strong balance sheet and HSBC's afternoon purchases prevented further losses, with foreigners being the major buyers of the day.

HSBC Garanti had multiple sales, while THY Pegasus purchased a new plane.

İş Yatırım sold several companies to Garanti, and Tacirler made multiple sales, with the stock exchange reaching a critical point at 10,700.

The world stock exchanges had a good day, but the Turkish stock market was not significantly impacted, with positive performance from various sectors.

Insurance emerged as the best sector of the day, following a significant purchase in the Turkish insurance market.

Several companies, including Fener, announced losses, while others experienced money inflows and outflows.