Market Update: Markets react to Turkish turmoil

Markets grind higher, amid Turkish turmoil as the Lira lost over 20% of its value versus the US Dollar. Ian Slattery reports.

Ian Slattery

Earnings season draws to a close, as the mid-August lull is upon us. To date, approximately 90% of S&P 500 companies have reported Q218 results with 71% of companies beating estimates on the top line and 84% of companies beating on the bottom line.

Political and economic developments from Turkey came thick and fast last week, as the Lira lost over 20% of its value versus the US Dollar, as President Erdogan attempted to avert a full blown financial crisis. President Trump turned the screw further by announcing further trade sanctions on the embattled economy. Contagion spread to some European financials on fears regarding exposure to Turkish creditors.

Elon Musk grabbed further headlines with an audacious tweet claiming he has ‘secured funding’ to take Tesla private, and off the stock market. It remains to be seen how this will end, with Tesla Bulls and Bears evident throughout the market.

The global index moved higher last week, finishing up 0.6%, with a positive move from the US offsetting weaker performances elsewhere. Oil was lower and closed at $67.50/barrel, whilst gold continued its recent weakness to close at $1,212 per troy ounce. The 10 year US bond yield finished at 2.87%. The German equivalent closed at 0.32%, amid ‘risk off’ sentiment.