Turkey to continue manufacturing F-35 parts through 2022: Pentagon
Istanbul’s main BIST 100 index rallied 30% in the second quarter, better than a nearly 18% rise in the emerging markets benchmark MSCI index, while Wall Street also capped its best quarter since 1998
will continue manufacturing components for F-35 fighter jets through 2022, U.S. defense officials said, despite Ankara being suspended from the program nearly a year ago over its purchase of a Russian-made air missile defense system. It is the U.S. Defense Department’s first official confirmation since President Donald Trump himself recently confirmed that Turkey continues to produce key parts for the jet. Turkish officials have also said production was continuing.
TURKEY
ECONOMIC activity had declined sharply in March and April as the country implemented measures to slow the virus’ spread. Turkey gradually eased measures aimed at reviving the economy in May and lifted most of them in June as it advanced in its fight against COVID-19.
“Investors are currently willing to look on the bright side and the optimism created by the reopening of economies was the main determinant in pricing,” Deniz Invest analysts said in a research note, adding equities in several other countries also marked hot quarters.
In the second quarter of 2009, the main Turkish index rose more than 43%.
Separately, the Turkish Capital Markets Board (SPK) said Tuesday it lifted a ban on short selling for the top 30 shares on the Borsa Istanbul Stock Exchange, while keeping the ban in place for other stocks.
The board had banned short selling on all stocks listed on the Istanbul stock exchange in February. The regulator has taken similar steps in the past in times of high volatility, including last year.
HIGHEST SINCE FEBRUARY
The BIST 100 index on Tuesday saw its highest level since Feb. 21, surging by 0.59% to reach 116.524 points at the closing bell.
It had started the day at 116,426.13 points and earned 681.77 points from Monday’s close of 115,843.01 points.
The index was down 0.65% at 115.764 at 5:30 p.m. local time yesterday.
WALL STREET’S BEST SINCE 1998
Separately, Wall Street Tuesday capped its best quarter since 1998 with more gains, a fitting end to a stunning three months for investors as the market screamed back toward its record heights after a torrid plunge.
The S&P 500 climbed 1.5%, bringing its gain for the quarter to nearly 20%. That rebound followed a 20% drop in the first three months of the year, the market’s worst quarter since the 2008 financial crisis. The plunge came as the coronavirus pandemic ground the economy to a halt, and millions of people lost their jobs.
The S&P 500 gained 47.05 points to 3,100.29 on Tuesday. The Dow Jones Industrial Average rose 217.08 points, or 0.9%, to 25,812.88. It had briefly been down 120 points. The Nasdaq composite climbed 184.61 points, or 1.9%, to 10,058.77.
The S&P 500 has rallied back to within nearly 8.4% of its record set in February, after being down nearly 34% in late March. At one point earlier this month, it had climbed as close as 4.5%.
“It’s the first time you’ve had backto-back (quarters) like this since the 1930s,” said Willie Delwiche, investment strategist at Baird. “It’s pretty unprecedented.”
The quarter’s gains were ignited by promises of massive amounts of aid from the U.S. Federal Reserve (Fed) and Congress. Low interest rates generally push investors toward stocks and away from the low payments made by bonds, and the Fed has pinned short-term interest rates at their record low of nearly zero.
But most of Wall Street says not to expect anything close to a repeat of the rocking second quarter. A rise in infections has several states pausing their lifting of restrictions. The surge in confirmed new cases is seeding doubts that the economic recovery can happen as quickly as markets had forecast. That helps explain why the market’s momentum cooled somewhat in June.
On Tuesday, Dr. Anthony Fauci, the U.S.’ top infectious-disease expert, warned that the number of daily new reported infections could surge to 100,000 if Americans don’t start following public health recommendations.
Beyond the coronavirus, analysts also point to the upcoming U.S. elections and other risks that could upset markets. If Democrats sweep Congress and the White House, which many investors see as at least possible, it could mean higher tax rates, which could weaken corporate profits.
“Broadly speaking, the market is reacting to economic data that is better than expected,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.
Schutte said the market is being supported by the likelihood that there won’t be a nationwide shutdown again, aggressive monetary policy and hopes for a vaccine sooner rather than later. “The path of least resistance is still two steps forward, one step back,” he said.