Week Ahead Macro View: Selloff Despite a Rate Cut, Brent at $117; All Eyes on the Fed and a Big Earnings Week

Good markets to all,

The week behind us showed that a rate cut alone is not enough of a catalyst for Borsa Istanbul. After losing 4.44% the previous week on the MSCI shock, the BIST 100 fell 2.49% on Monday as news spread near the close that Capital Markets Board (SPK) Chairman Mahmut Sütcü was being removed. It bounced 3.22% to 11,797.70 on Tuesday, touching the week's high of 11,806.76 intraday, but the recovery did not last. The index fell 1.87% on Wednesday, 3.08% on Thursday after the rate decision and 0.92% on Friday, closing the week at 11,116.99. The weekly loss was 604.73 points, or 5.16%. On Friday the index fell below 11,000 for the first time since December 2025, dipping as low as 10,707 intraday. The most striking feature of the week was the breadth of the selling: 95 of the 100 stocks in the BIST 100 ended the week lower. Among sectors, financial leasing and factoring lost 25.88%, insurance 12.63%, mining 12.08% and basic metals 11.31%; the banking index fell 4.47% and the BIST 30 4.70%. BINHO (-22.22%), Türkiye Sigorta (-20.27%), Gübre Fabrikaları (-19.92%) and Vestel (-19.50%) were the biggest losers; Aksa (+3.31%) and Halkbank and Sabancı Holding (both +1.99%) were among the few names in positive territory. Friday's turnover was heavy at TRY 148.8 billion. USD/TRY ended the week up 0.36% at 49.71 and EUR/TRY up 0.03% at 55.78; gram gold fell 4.00% to TRY 6,391, tracking the drop in the ounce. By our own calculation, the index stands at roughly $224 in dollar terms, about 5.5% below the previous week's $237. Among investment funds, money market funds were again the only clear winner, up 0.62%; equity funds lost 6.31% on average.

Thursday's MPC decision was in line with expectations in substance: the policy rate was cut by 100 basis points to 36%, the overnight lending rate to 39% and the borrowing rate to 34.5%. It was the first cut since January and ended a pause of five meetings that began when the Iran war broke out at the end of February. But the statement was cautious: the committee stressed that the "size and timing" of steps would be set meeting by meeting and prudently, and that high energy prices driven by geopolitical tensions were raising upside risks to the inflation outlook. İş Yatırım described the decision as a "hawkish-looking cut." The banking index fell 5.15% over the two days after the decision. Behind the selling were fund liquidations, margin calls in credit accounts and foreign selling feeding off one another. The SPK's flexibility measure, introduced in September and extended on 3 October, which lets brokers apply a 20% equity ratio instead of the 35% minimum on margin trades, remains in place through the 30 October session. Global pressure built the same day: MSCI Turkey fell 2.94%, MSCI Emerging Markets 2.46%, and Brent rose 4%.

Abroad, the week had two themes: oil and the financing of AI. US stocks rose through the first three days; on Wednesday the S&P 500 reached 7,757, within 0.8% of its record, and the chip index (SOX) ended an eight-day losing streak on Monday. Thursday changed the picture: Lam Research's warning about supply constraints and Meta's first negative free cash flow in more than a decade reignited concerns over the cost of AI investment. The SOX fell 6.72%, with all 30 of its stocks closing lower; the Nasdaq dropped 2.60%, its steepest daily decline since early June. Tech steadied on Friday, but the Dow Jones fell 1.23% on sharp declines in AT&T and T-Mobile. For the week, the S&P 500 ended down 0.47% at 7,623.68 and the Nasdaq down 0.7% at 25,955.34; the Dow Jones rose 0.4% to 52,215.16, its third weekly gain in a row. In bonds, the 10-year yield fell about 19 basis points on Thursday, its biggest one-day drop since March 2023, and finished the week at about 5.00%. Markets price a better than 90% chance that the Fed holds rates on 28 October; the probability of a December hike ranges from 71% to 84% depending on the source.

Macroeconomy · Geopolitics · Global

1 MPC: the cut came, the message was cautious. The CBRT cut the policy rate from 37% to 36%; the top of the corridor moved to 39% and the bottom to 34.5%. The statement said recent data and leading indicators confirm the decline in the underlying trend and that domestic demand remains weak. On the other hand, it stressed that energy prices, pushed higher by geopolitical developments, are increasing upside risks to the inflation outlook. The most important line was that steps will be taken meeting by meeting and prudently in terms of "size and timing"; the committee repeated that it would tighten policy in the event of a "significant and lasting deterioration" in the inflation outlook. That language weakened market expectations of an automatic cut in December. Surveyed economists had expected another cut to 35% in December. USD/TRY stayed calm at around 49.63 after the decision; the 2-year bond yield rose 13 basis points to 39.62% on Thursday and 5-year CDS rose to 257 basis points. The meeting summary, which will show the detailed reasoning behind the decision, is due on 30 October.

2 SPK and KGK heads removed, fund law passes parliament. By a decision published in the Official Gazette on 19-20 October, SPK Chairman Mahmut Sütcü and Public Oversight Authority (KGK) Chairman İbrahim Ömer Gönül were removed from office. Early reports had described it as a resignation. As of the weekend, there was no news of a new SPK appointment. Coming at a time when MSCI has voiced concerns about transparency and trading reliability, the change at the top of the regulator was read by the market initially as a source of uncertainty. Law No. 7596 on fund liquidation, meanwhile, was approved by the General Assembly of parliament on 22 October. The law allows interim payments of up to TRY 1 million per investor and gives priority to small investors and money market funds. As of 24 October it had not yet been published in the Official Gazette, and the payment timetable is not yet known. Finance Minister Şimşek said on 20 October that 66 of 131 funds had been fully liquidated, that TRY 40.8 billion had been paid to 45,747 accounts, and that the law's entry into force would clear the way for liquidating around 390,000 accounts. There was no new MSCI announcement this week; the 15 October freeze remains in place.

3 Confidence indices fall, with a sharp drop among consumers. The October consumer confidence index fell from 91.9 to 84.8; the 7.7% decline shows the fund crisis's impact on households. Households' assessment of their current financial situation fell from 75.3 to 68.3 and general economic expectations from 89.8 to 81.7; households' 12-month-ahead inflation expectation stands at 43.75%. The seasonally adjusted real sector confidence index fell 1.4 points to 101.1, while seasonally adjusted capacity utilization rose 0.2 points to 74.3% (74.5% unadjusted). Central government gross debt stock reached TRY 16.20 trillion at end-September, of which TRY 7.98 trillion is lira-denominated and TRY 8.22 trillion foreign currency-denominated.

4 Reserves fall again, foreign selling enters a third week. The CBRT's gross reserves fell by $2.48 billion to $169.1 billion in the week of 16 October; net reserves dropped $6.24 billion to $51.5 billion and net reserves excluding swaps $4.89 billion to $39.3 billion. The previous week's recovery thus lasted only a single week. In the same week, foreigners were net sellers of $88.8 million in equities, $44.4 million in government bonds and $20.7 million in corporate bonds; total outflows were about $154 million. Equity selling extended into a third week, and foreigners' equity holdings fell from $35.92 billion to $33.98 billion. The foreign share of Borsa Istanbul stood at 37.07% on 23 October. On ratings, Scope affirmed Türkiye's BB- rating with a stable outlook on Friday and said it sees the economic impact of developments in the fund market as limited.

5 Fed: expectations moved away from a near-term hike during the blackout. Fed officials were in the quiet period ahead of the 27-28 October meeting, so data and earnings drove expectations. Weekly jobless claims fell to a three-month low of 194,000. The flash manufacturing PMI rose to 56.0, a 53-month high, while selling prices rose at the fastest pace since August 2022. Housing looks weak: the NAHB index, at 29, is at its lowest since June 2012, and September housing starts fell 5.2%. Final Michigan consumer sentiment came in at 48.0; one-year inflation expectations are 4.7%. In a Reuters poll, 94 of 100 economists expect rates to be held on Wednesday. The focus is on what signal Warsh gives about a possible December hike.

6 Global growth and other central banks. China's economy grew 4.5% year on year in the third quarter, beating expectations; in September, industrial output rose 5.5% and retail sales 1.1%. Even so, the CSI 300 index posted its eleventh consecutive weekly loss, the longest streak since 2005. In the UK, September inflation came in above expectations at 3.5%, and markets price a 98% chance that the Bank of England hikes by 25 basis points on 5 November. The euro area flash composite PMI fell from 53.1 to 51.9. Fiscal worries and street protests in France briefly pushed the French 10-year yield above 5% for the first time since 2002. The Bank of Russia held its rate at 14% while raising its 2026 inflation forecast to 7.1-7.6%. South Korea held at 3%, and the Philippines hiked by 50 basis points.

7 Oil: Houthi attacks move inside Saudi Arabia. Brent closed Friday up 3.14% at $116.72 and topped $117 intraday; that is its highest close since 29 April, with a weekly gain of about 6.2%. December WTI is at $103.27; because of the contract roll, its weekly gain is about 2% depending on the source. The main driver was Houthi missile attacks targeting Riyadh, Taif and Yanbu; Saudi Aramco evacuated its headquarters in Dhahran on 22 October. In the Strait of Hormuz, Iran's Revolutionary Guards claimed seven tankers had been hit, while the UK maritime security agency UKMTO confirmed two attacks; Kpler says at least 18 ships have been targeted in the past two weeks. Reports of possible US military action are also keeping the risk premium high. US crude inventories fell 3.06 million barrels, far more than expected; the Strategic Petroleum Reserve is at its lowest since 1982.

8 Gold below $4,000, crypto weak. Spot gold ended the week down about 4% at $3,998, dropping below $4,000 for the first time since mid-July; it was the sharpest weekly decline since June. Silver is at $53.97, its lowest since November 2025, with a weekly loss of about 5-6%. Persistent rate-hike expectations and rising oil feeding inflation worries put pressure on non-yielding precious metals. Bitcoin closed Friday at about $81.2K; on Saturday it touched $79,146, its lowest in more than a month, as more than $810 million of positions were liquidated in 24 hours. As of Sunday morning, Bitcoin is at about $80.3K and Ethereum about $2,370.

Sectors

1 Leasing-factoring and insurance: the heaviest price of the fund probe. The factoring-leasing index was the worst-performing sector, down 25.88% on the week; the insurance index fell 12.63%. At the centre of the pressure on insurers was Türkiye Sigorta: the company's former general manager, Taha Çakmak, was detained again on 23 October and formally arrested on 24 October; he is alleged to have received $1 million from the Tera group. Türkiye Sigorta postponed its Q3 results on 19 October, and the stock ended the week down 20.27%. Of 22 suspects referred to court over the weekend, 15 were arrested.

2 Banking: the cut is positive, but selling pressure won out. The banking index ended the week down 4.47%; most of the decline came after the rate decision, and the index lost 5.15% across Thursday and Friday. Under normal conditions, a rate cut is read as positive for bank margins as it lowers deposit costs. This week, however, the cautious MPC statement and forced selling in margin accounts mattered more. Akbank fell 5.24% and Garanti BBVA 3.80%, while Halkbank outperformed the market with a 1.99% gain. The weighted average rate on lira deposits was 42.88% in the week of 16 October. Banks' Q3 results begin this week with Akbank (27 October) and Garanti BBVA (28 October).

3 Metals and mining: commodity slide and an earnings reaction. The basic metals index fell 11.31% and mining 12.08%; on Friday basic metals was the worst-performing sector, down 6.01%. The sharp fall in gold and silver weighed on mining stocks. Erdemir hitting limit-down on Friday, despite net profit above expectations, deepened the weakness in metals.

4 US: energy at a record, telecoms and chips shaken. The S&P 500 energy sector rose about 2.5% on Friday to a record high; SLB gained about 7% after its results. In telecoms, reports that SpaceX is looking for cell sites for a fourth wireless carrier sent AT&T and T-Mobile down more than 6%. The semiconductor index, after Thursday's 6.72% drop, is more than 26% below its 22 June record, though it remains up about 51% year to date. AI infrastructure companies ("neoclouds") remained the most fragile group: CoreWeave has lost 35% and Nebius 32% in October. CoreWeave's 5-year CDS is above 1,100 basis points. According to LSEG data, S&P 500 companies' Q3 earnings growth is tracking above 32%.

Companies

1 Meta: strong revenue, first negative free cash flow. Meta reported Q3 revenue of $64.60 billion, up 26%, and earnings per share of $3.83; results included a $9.89 billion legal charge. Capex rose to $34.91 billion and free cash flow was negative at $2.12 billion, its first cash outflow in more than a decade. The company narrowed its 2026 capex range to $135-145 billion; Q4 revenue guidance is $73-76 billion. Its future lease and contract commitments total about $825 billion. The stock rose about 3% after hours, then fell 6.98% the next day.

2 Tesla, Netflix and Texas Instruments: a mixed picture. Tesla's $28.05 billion in revenue was broadly in line with expectations, while adjusted EPS of $0.48 and positive free cash flow of $1.53 billion beat estimates. The company cut its 2026 capex guidance from more than $25 billion to about $20 billion; the stock fell 3.08% on Thursday. Netflix reported $12.87 billion in revenue but cut its annual ad revenue forecast from about $3 billion to $2.7 billion; the stock hit a 52-week low. Texas Instruments beat expectations with $6.06 billion in revenue and EPS of $2.62; data-center sales rose about 95%. Lam Research, despite record revenue, fell 11.76% after warning that supply constraints would extend into next year.

3 US industrials and defence: guidance raises rewarded. Lockheed Martin raised its guidance and reported a $292 billion backlog; the stock rose 6.96%. 3M raised its profit forecast and expanded a data-center deal with Amazon (+5.78%). Procter & Gamble rose 5.58% on revenue of $23.28 billion and EPS of $2.00, and Blackstone gained 8.38% with $1.368 trillion in assets under management. General Motors, however, fell 6.84% on commodity costs despite beating estimates and announcing a $20 billion buyback. American Express raised its guidance but fell 3.7% after announcing it would cut about 5% of its workforce.

4 Earnings season on Borsa Istanbul: TAV and Erdemir. TAV Airports reported Q3 net profit of TRY 9.09 billion, well above the TRY 7.28 billion consensus. Revenue rose 21.2% to TRY 32.63 billion. However, the company cut its annual passenger guidance to 112-118 million and its EBITDA guidance to €580-630 million. Erdemir beat expectations with net profit of TRY 2.21 billion, while EBITDA of TRY 7.98 billion came in slightly below expectations; the rise in net debt from $817 million to $1 billion stood out, and the stock hit limit-down on Friday, falling 9.97%. A large number of companies, including Akbank, Aselsan, Garanti BBVA and Arçelik, report this week.

Week Ahead: Fed Wednesday, Tech Giants and a Short Trading Week

The week ahead will test US monetary policy and the AI theme on the same day. A hold is the base case for the Fed decision on Wednesday at 21:00 TRT; what matters is the framework Warsh sets out for December in the face of rising oil and strong price components in the flash PMIs. The same evening, Microsoft and Alphabet, followed by Amazon on Thursday evening, will provide the most important data set on the sustainability of AI investment after Meta's negative cash flow and Lam Research's supply warning. Thursday also brings US Q3 growth, September PCE inflation and the ECB decision. At home the week is short: Borsa Istanbul trades a half day on Wednesday and is closed on Thursday for Republic Day. In this short week, Akbank and Garanti BBVA results will show for the first time how the fund crisis and the rate cut are affecting bank margins. Friday's MPC summary may clarify what the emphasis on "size and timing" means for the December meeting. Publication of the fund law in the Official Gazette and the appointment of a new SPK chair are also on the watch list.

This Week's Calendar

Monday 26 October — Germany Ifo business climate index (12:00 TRT; expected 89.8, prior 89.9). South Korea Q3 GDP advance estimate. China Communist Party Fifth Plenum (26-29 October). Earnings (Borsa Istanbul): Arçelik, Türk Traktör, Çimsa, Brisa, TAB Gıda, Agesa, Anadolu Hayat, Teknosa. Earnings (US): Verizon (before the open), Cadence (after the close).

Tuesday 27 October — TurkStat September labour statistics (10:00; prior unemployment 7.8%, participation 52.5%). US durable goods orders (15:30; expected +0.6%). Case-Shiller house prices (expected 2.6% y/y). Conference Board consumer confidence and new home sales (17:00; consumer confidence expected 80.5, prior 81.9). China industrial profits. Earnings (Borsa Istanbul): Akbank, Aselsan, Anadolu Sigorta. Earnings (US/Europe): Coca-Cola, Boeing, UPS, HSBC, Novartis, PayPal (before the open); Visa (after the close).

Wednesday 28 October — Half day on Borsa Istanbul. TurkStat September foreign trade statistics (10:00). Australia Q3 CPI (03:30). Reserve Bank of New Zealand (04:00; 25 bp hike to 3.00% expected). Bank of Canada (16:45; a 25 bp hike to 2.50% is about 80% priced). UK Autumn Budget. Fed rate decision (21:00; expected hold at 3.75-4.00%), Warsh press conference (21:30). Earnings (Borsa Istanbul): Garanti BBVA, TSKB. Earnings (US/Europe): GE Vernova, UBS, ADP (before the open); Microsoft, Alphabet, KLA, ServiceNow, T-Mobile (after the close).

Thursday 29 October — Republic Day, Borsa Istanbul closed. US Q3 GDP advance estimate (15:30; expected 3.0-3.2%, prior 2.2%). US September PCE (15:30; headline expected 3.6% y/y, prior 3.4%; core expected 3.1% y/y). US weekly jobless claims (15:30). ECB rate decision (16:15; deposit rate expected to stay at 2.50%), Lagarde press conference (16:45). Euro area economic sentiment. Earnings: Eli Lilly, Mastercard, Caterpillar, Merck, Shell (before the open); Amazon, Intel, Coinbase, Strategy (after the close).

Friday 30 October — Bank of Japan rate decision (no fixed time, usually around 06:00 TRT; expected hold at 1.25%). Tokyo CPI. Economic confidence index and Q3 tourism revenue (10:00; economic confidence prior 101.3). CBRT MPC meeting summary (14:00). Euro area Q3 flash GDP (13:00; prior 0.6% q/q). German flash CPI (around 16:00). US employment cost index (15:30), Chicago PMI (16:45). Speeches by the Fed's Daly and Musalem. Earnings (Borsa Istanbul): Çağdaş Cam, Kalyon PV, Gelecek Varlık Yönetimi. Earnings (US/Europe): ExxonMobil, Chevron, AbbVie, AstraZeneca, BP.

Further ahead — 31 October China official PMIs. 2 November Apple earnings. 3 November US midterm elections; Yapı Kredi earnings. 5 November Bank of England decision; İş Bankası, Ford Otosan and Tofaş earnings.

5 Things to Watch

1 Fed: a hold, and a December signal. A hold is all but certain. Depending on the source, the probability of a December hike is between 71% and 84%. Although Warsh says he does not give forward guidance, his assessment at the press conference, with oil nearing $117 and prices accelerating in the flash PMIs, will set the direction for bond yields and the dollar.

2 AI earnings: spending plans and financing. After Meta's negative free cash flow, the capex guidance from Microsoft, Alphabet and Amazon is the question the market is scrutinising most. Whether higher spending is funded from cash flow or with debt will determine the direction of chip stocks and the "neocloud" companies.

3 Bank earnings and the MPC summary. Akbank and Garanti BBVA results will be the first data to show the fund crisis's effect on asset quality and deposit costs. Friday's MPC summary may reshape expectations of a cut at the December meeting.

4 The regulatory calendar: the fund law and the SPK appointment. Publication of the fund law in the Official Gazette is a precondition for interim payments to begin. The appointment at the SPK and the content of capital market regulations are critical for MSCI's June 2027 timeline. The SPK's flexibility measure on margin trades expires on 30 October.

5 Oil and Gulf risk. With Brent nearing $117, Houthi attacks, tanker incidents in Hormuz and possible US military action are decisive. A sustained move above $120 would mean fresh pressure on both Türkiye's current account and global inflation expectations.

Technical View

SPY (S&P 500 ETF) — Closed at $759.97 on 23 October; -0.43% on the week, -1.02% over one month, +2.85% over three months, +13.13% over one year. Weekly volatility annualized at 12.6%; worst day Thursday (-1.18%). On Fibonacci levels, the nearest support is $748.60 and the nearest resistance $781.62. The regime model has shown a "choppy" profile for 23 weeks.

QQQ (Nasdaq 100 ETF) — Closed at $704.40 on 23 October; -0.76% on the week, -4.97% over one month, +2.95% over three months, +15.37% over one year. Weekly volatility annualized at 26.8%; worst day Thursday (-2.86%). The price is below the 50% Fibonacci level at $712.00; the next support is $687.45. The regime model has been "choppy" for 28 weeks.

Gold (XAU/USD) — $3,993.70 as of 24 October; -4.11% on the week, -6.59% over one month, -1.54% over three months, -2.53% over one year. Worst day of the week Thursday (-2.62%). The price has fallen below the bottom of the Fibonacci range the model tracks; the nearest resistance is $4,371. The regime model has been "quiet" for 7 weeks.

Bitcoin (BTC/USD) — $80,312 as of 25 October; -2.20% over seven days, -4.50% over one month, +25.97% over three months, -28.08% over one year. The price is below the 50% Fibonacci level at $81,846; the nearest support is $77,214. The regime model has been "quiet" for 8 weeks.

BIST 100 — The 11,116.99 close is 5.16% below the previous week's 11,721.72. The intraweek range was 10,707-11,807. The 11,000 level, broken intraday on Friday for the first time since December 2025, stands out as a psychological threshold; Tuesday's peak around 11,800 is the first resistance zone. In dollar terms, about $224.

Closing

The week behind us showed that the pressure on Borsa Istanbul after the MSCI shock did not ease with the rate cut; instead, it turned into a broad-based selling wave. The cut itself was in line with expectations, but the cautious tone, the change at the top of the regulator, forced selling from fund liquidations and foreign outflows all landed in the same week. The breadth of the selling, and the steep losses in sectors closest to the fund probe such as factoring and insurance, show the market's focus shifting from macro data to confidence and institutional structure. The fund law's passage through parliament and Scope's rating affirmation were positive steps; how much they help the market depends on how quickly the law takes effect and payments begin.

Abroad the picture was more balanced: US indices ended the week only slightly lower despite Thursday's sharp chip selloff, and bond yields fell. Brent nearing $117, however, remains the most important background risk both for the Fed's December decision and for Türkiye's inflation and current account outlook. The equation for the week ahead is clear: Wednesday evening's Fed decision and the tech giants' earnings will set the direction of global risk appetite, while Akbank and Garanti BBVA results and Friday's MPC summary will set the direction of local assets in a short trading week.

Methodology note: The BIST 100 weekly change was calculated from the 16 October (11,721.72) and 23 October (11,116.99) closes. Sources differ on Friday's intraday low: Endeks24, Finans Gündem and Bizim Menkul report 10,707.18, while CNBC-e reports 10,772; the majority figure of 10,707 was used. The index's dollar value was calculated by us by dividing Friday's close by the weekly closing exchange rate (49.706). For USD/TRY, Hamle/Politikam weekly closing data (49.706) was used; for gram gold, the Finans Gündem figure (TRY 6,390.70, -4.00%), which is consistent with the ounce price and the exchange rate, was used; Hamle/Politikam reports gram gold at TRY 6,370 (-4.18%). The latest dated figures for the 2-year bond yield and CDS are from Thursday. S&P 500, Nasdaq and Dow weekly changes were calculated from the 16 October and 23 October closes. The December contract's Friday settlement price was used for Brent; for WTI, the weekly change is given approximately because of the contract roll. The probability of a Fed hike in December is given as a range because it varies between 71% and 84% depending on the source. SPY, QQQ, gold and Bitcoin levels, as well as Fibonacci and regime information, come from the FinSight data layer. Bitcoin's seven-day change is calculated against that source's 18 October value and differs from the $81,169 reference used in last week's bulletin. Moody's and Fitch have no remaining review dates for Türkiye in 2026.

This bulletin is not investment advice; it is a data summary.