Wall Street Banks Boost Turkey Bets as Court Delay Brings Relief
Strategists at both banks expect investors to shift their focus to Turkey's slowing inflation and the prospect for interest-rate cuts, which should bolster markets in the coming months.
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38 minutes ago
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Turkey says PKK disarmament could start within days, says AK Party spokesman
ANKARA/BAGHDAD (Reuters) -The Kurdistan Workers Party (PKK) could start handing over its weapons within days, a spokesman for Turkey's ruling AK Party said on Tuesday, the clearest sign yet that efforts to secure the outlawed group's disarmament may be nearing a breakthrough. Asked by reporters whether there was a timeline for the PKK militants to lay down their arms, spokesman Omer Celik said: "I don't want to give a definite timeline at this stage. (...) Now we've reached a stage where it could happen in a matter of days." Celik added that the coming days would be "extremely important for a Turkey free of terrorism". The PKK, which has been locked in a bloody conflict with the Turkish state for more than four decades, decided in May to disband and end its armed struggle. Two PKK sources based in northern Iraq confirmed that a small group of fighters was expected to hand over their weapons at a location in the Iraqi Kurdish city of Sulaimaniya in the "coming days". "Preparations for the handover are underway in coordination with Kurdish security authorities in Sulaimaniya," one of the PKK sources told Reuters. A Kurdish security official in Sulaimaniya, speaking on condition of anonymity due to the sensitivity of the matter, said the handover event would be overseen by security officials from the central government in Baghdad. "If everything goes according to plan, the PKK weapons handover will take place next week," said the Kurdish security official. The second PKK source said: "The disarmament ceremony will serve as a goodwill gesture aimed at building confidence and paving the way for the Turkish government to take further steps and fulfil its obligations toward lasting peace." Separately, Turkey's Intelligence Chief Ibrahim Kalin visited Iraq's Erbil on Tuesday to discuss steps to be taken to end terrorism in the region, according to a statement by the intelligence agency. Kalin met with Iraqi Kurdish Prime Minister Masrour Barzani, Iraqi Kurdistan President Nechirvan Barzani and the leader of KDP Masoud Barzani and other high level leaders during his visit. Since the PKK launched its insurgency against Turkey in 1984 - originally with the aim of creating an independent Kurdish state - the conflict has killed more than 40,000 people, imposed a huge economic burden and fuelled social tensions. The PKK's decision to disarm could boost NATO member Turkey's political and economic stability and encourage moves to ease tensions in neighbouring Iraq and Syria, where Kurdish forces are allied with U.S. forces.
Yahoo
2 hours ago
- Yahoo
Traders' Fear of Missing Out on Stock Gains Outweighs Tariff Concerns
(Bloomberg) -- President Donald Trump's tariff pause is set to end on July 9, with few deals locked in and scant progress in negotiations. Yet the stock market that once swung wildly on trade headlines appears to see little risk, as equity indexes sit near all-time highs and volatility evaporates. Struggling Downtowns Are Looking to Lure New Crowds Sprawl Is Still Not the Answer California Exempts Building Projects From Environmental Law What gives? In part, the calm is being fueled by expectations that Trump will extend his tariff deadline based on his pattern of threatening harsh measures and subsequently backing down, a strategy analysts and strategists call 'TACO' for 'Trump Always Chickens Out.' But more importantly, Wall Street pros see no sense in fighting the market's momentum as the economy remains healthy and Corporate America appears to be taking trade policies in stride — at least for now. 'There's still some focus on July 9, but so many other factors are being watched these days, too,' said Michael Kantrowitz, chief investment strategist at Piper Sandler & Co. 'Once again, investors are less worried. In the absence of a spike in rates, inflation or the unemployment rate, stocks will continue to grind higher.' The S&P 500 Index just closed out its best quarter since December 2023 and cleared the 6,200 level before dipping back below on Tuesday and ending the session down 0.1%. The technology-heavy Nasdaq 100 Index had its best quarter since March 2023 as the stock market's usual leaders are taking their place at the front of the line again. Both posted losses in the first quarter. Meanwhile, traders have amped up their allocations to the market's riskiest corners. Even institutional investors, who mostly stayed put for much of the 25% upswing since April, are gradually moving off the sidelines. And options data shows that Wall Street isn't concerned about substantial volatility anytime soon. Smart Money In 'Trade deals of some kind are likely to come, and underneath, earnings estimates have stabilized after falling in the immediate aftermath of April,' Steven Chiavarone, senior portfolio manager and equity strategist at Federated Hermes, said in a Bloomberg Television interview on Monday. 'What started out as just a relief rally is starting to become something real, and that's what sucks those investors in — slowly and reluctantly.' The S&P 500's double-digit surge from its April 8 trough just before Trump paused his tariffs has largely been driven by retail investors. Now, the so-called smart money is starting to buy in as the rally shows few signs of stopping. Systematic strategies last week ratcheted up their exposure to equities, though they still remain underweight, with positioning in most sectors below the historical average, according to data compiled by Deutsche Bank AG's Parag Thatte. Markets have priced out 84% of macroeconomic risk, based on an assessment by Piper Sandler's Kantrowitz of high-yield credit spreads, leaving room for stocks to move even higher despite the S&P 500 adding more than $10 trillion in value since early April. The optimism has defied war in the Middle East, uncertainty around the macroeconomic outlook, and a lack of clarity on trade. 'We were pretty bullish for June on things that have nothing to do with Trump — this just has to do with the fact there's other stuff going on that's quite positive,' said Alexander Altmann, global head of equities tactical strategies at Barclays Plc. The strategist cited bank deregulation, big tech firms' continued spending on artificial intelligence, and Trump's $3.3 trillion tax and spending bill as factors bolstering the economy. The Senate passed the bill on Tuesday in 51-50 vote with Vice President J.D. Vance casting the deciding ballot. But it could still face resistance in the House of Representatives. Of course, none of this is to say that the risks facing the market have gone away. Even if Trump extends his tariff pause, there are other levies that are likely to raise expenses for companies or consumers — or both. Tempered Enthusiasm 'We're still going to end up with high tariff rates and absorb that cost at some point in the future,' Altmann said. 'This is a market where it's very hard to look and trade more than four weeks ahead right now. And it's very hard to have a strong opinion on events that could or could not happen six months from now.' The way things stand, exporting nations without a bilateral accord in place by July 9 will face tariffs Trump presented on April 2, ones that are much higher than the current baseline 10% so-called reciprocal rate applied to most countries. The UK has locked in a deal that reduced some proposed levies but kept the reciprocal rate in place and left unresolved one of Britain's pain points — 25% duties on steel. The US and China finalized a trade understanding reached in Geneva, US Commerce Secretary Howard Lutnick said last week, but described it as far from comprehensive and with key questions remaining. And Trump has threatened to ramp up tariffs on Japan. 'We don't have any significant trade deals — we have some memorandums of understanding, we have some agreement to move forward, but we don't have anything concrete,' said Kate Moore, chief investment officer of Citigroup Inc.'s wealth unit. 'I've been surprised, to be very honest with you, that the market seems to not care about it. It's one of the reasons why this doesn't feel like a fundamentally-driven market, despite the fact that we see a lot of strength in technology and artificial intelligence.' At the same time, JPMorgan Chase & Co.'s trading desk says the setup is bullish, projecting a streak of all-time highs as earnings carry positive momentum with trade deals expected to be announced. Andrew Tyler, the bank's head of global market intelligence, is looking out for the June nonfarm payrolls report due Thursday. As long as it remains above 100,000, he expects stocks to keep logging fresh records. A survey by Bloomberg of economist estimates sees it coming in at 110,000. 'For now, the market will look through those potential events,' Tyler wrote in a note to clients on Monday, referring to trade turbulence. 'Further, we think the July 9 date gets rolled to avoid any market volatility.' --With assistance from Matt Turner. (Updates with S&P 500's Tuesday performance in fifth paragraph.) 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Yahoo
2 hours ago
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The stock market is hitting records — three reasons why top Morgan Stanley strategist sees more room to run
Stocks are on course to enter the second half of 2025 in record territory. The rebound from the mid-April trough has been sharp, with the S&P 500 SPX up nearly 24% Inevitably, as we enter the often treacherous summer months, investors and analysts alike are questioning whether the market's strength can be justified. My wife and I have $7,000 a month in pensions and Social Security, plus $140,000 cash. Can we afford to retire? I'm a stay-at-home mom. Do I take a part-time job to spend more time with my kids — or get a job for six figures? Why out-of-favor Apple holds the key to tech stocks in the coming weeks My mother, 89, keeps getting her credit card scammed. She gets a new one — and it happens again. What's going on? 'My whole financial world is upside down': I'm 'medically retired' at 51 with $428K in stocks. Is this enough to live on? Mike Wilson, Morgan Stanley's top equity analyst, thinks it can. In a new note on Monday, he lays out three reasons why he remains bullish on a six to 12 month horizon. The first point is earnings. Wilson observes that analyst forecasts for S&P 500 earnings have improved markedly in recent weeks as fears subside about the possible damage done to corporate profits from the Trump trade war. Importantly, the more optimistic view of company profits is widening, beyond the already popular big tech names, for example. Indeed, earnings revision breadth (ERB), a measure of how widespread positive or negative earnings estimate changes are, has risen from minus 25% in mid April to the current minus 5%. Wilson says that similar inflections in ERB have pointed to 'strong returns ahead,' though he accepts that 'such a broadening is likely to take hold in large cap quality before it involves small caps/low quality stocks.' He also notes that earnings growth will outperform economic growth — a reversal of what was seen in 2022 to 2024 — because of a weaker dollar and favorable tax incentives from the Trump administration's 'Big, Beautiful Bill'. The second factor is shifting expectations of Federal Reserve policy. Wilson says Morgan Stanley economists think the Fed will cut interest rates seven times in 2026, as unemployment becomes more of an issue than inflation. Such an easing of policy should be a tailwind for stocks. '[T]he equity market isn't going to wait for the obvious signal in terms of a more dovish shift in monetary policy from the Fed — i.e., stocks will get in front of it,' he says. In fact, he reckons that has already started to happen. The danger to this positive impact on equities would be if data showed an acceleration in the unemployment rate and multiple negative payroll numbers — though that is not the Morgan Stanley economists' baseline forecast. The third factor is stocks' traditional ability to shrug off exogenous shocks. 'The equity market seems to be following the historical playbook around prior geopolitical risk events that we highlighted last week — stability in performance after a few days,' says Wilson. Linked to this — as the Israel-Iran conflict abates — is the pullback in oil prices CL.1 from the recent spike, which has reduced the risk of higher energy costs threatening the business cycle. In addition, Wilson notes that the proposed 'revenge tax' that was seen damaging investment into the U.S. now looks likely to be dropped from the 'Big, Beautiful Bill'. Finally, Wilson observes that the Treasury market's term premium — the extra return that investors demand to take the risk of lending to the U.S. over longer periods — has fallen back over the last month as investors stress less about the U.S.'s fiscal position. 'With this dynamic taking place, and the 10-year yield BX:TMUBMUSD10Y staying contained below 4.50%, we believe interest rate risk has been reduced for the time being,' Wilson says. He maintains his base case S&P 500 target over the next 12 months at 6,500. U.S. stock-indices SPX DJIA COMP are higher at the opening bell as benchmark Treasury yields BX:TMUBMUSD10Y fall. The dollar index DXY is down, while oil prices CL.1 rise and gold GC00 is trading around $3,280 an ounce. Key asset performance Last 5d 1m YTD 1y S&P 500 6173.07 2.45% 3.99% 4.96% 12.75% Nasdaq Composite 20,273.46 4.25% 6.07% 4.99% 14.33% 10-year Treasury 4.259 -9.00 -19.10 -31.70 -20.80 Gold 3295.6 -2.62% -3.25% 24.87% 40.73% Oil 65.41 -2.69% 3.76% -8.99% -21.55% Data: MarketWatch. Treasury yields change expressed in basis points Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. U.S. economic data due Monday include the Chicago business barometer for June, due at 9:45 a.m. eastern. Atlanta Fed President Raphael Bostic will speak on the economic outlook at 9:00 a.m., and Chicago Fed President Austan Goolsbee speaks at 1:00 p.m. Trade talks between Canada and the U.S. are back on after Ottawa did a U-turn on imposing a digital services tax on U.S. companies. The Senate is expected to vote on Republican's tax bill on Monday. Big U.S. banks passed the Federal Reserve's stress tests, it was revealed late Friday. China's manufacturing sector shrank for the third month in a row. Moderna shares MRNA are up after the company announced positive phase 3 results for its seasonal influenza vaccine. Nvidia insiders cash out $1 billion worth of shares. One American's two-year quest to move his business out of China. 'He's going to do everything to damage the president': Former Musk friend on the Trump fallout. 'So far, the current bull market looks like a normal one, with the potential to match the returns of some of the best bull markets since the mid-1960s.' That's Ed Yardeni, of Yardeni Research, writing in his latest note. He's still targeting 6500 for S&P 500 by the end of this year and 10,000 by the end of what he calls the 'Roaring 2020s' decade. 'It's a bit hard to believe, but the main risk at this time may be a stock market meltup, i.e., a speculative bubble. That's where we were only four and a half months ago when the latest correction started!,' Yardeni says. Read more here. Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern. Ticker Security name TSLA Tesla NVDA Nvidia PLTR Palantir Technologies GME GameStop AMD Advanced Micro Devices AMZN AAPL Apple TSM Taiwan Semiconductor Manufacturing META Meta Platforms GNS Genius China's soccerbots. Spain's most cuddly cow. Tech CEO pays $400,000 to conduct Toronto Symphony. For more market updates plus actionable trade ideas for stocks, options and crypto, . Companies are issuing the least amount of 30-year bonds in 14 years. What that tells investors. My job is offering me a payout. Should I take a $61,000 lump sum or $355 a month for life? My brother stole $100K from my mom to buy bitcoin. Do I convince her to sue him? How June's bond rally might give way to a round of volatility in Treasury bills My friend asked me to chip in $1,600 for her son's prom-night limo. Has the world gone mad? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
