The stock market, which had been on the back foot for two weeks, rose yesterday with Powell's statements. The FED kept interest rates steady yesterday. But it gave clear messages that it would cut in September. When we looked at the actual FED document, the messages were a bit more blurry. We saw that they played with a few words there. One of them was that they put inflation into the text that it was relatively high, they were saying it was high before. They also emphasized the definition that we have two duties. They were saying that we were very focused on inflation before. This time, we are very focused on inflation and unemployment and we think we are making serious progress in inflation. The text was more or less within that framework. It is a text where they played with words like that. Powell came out and basically read that text. There was no great excitement there. But then we saw that Powell actually stated in the first question that the FED was making preparations for a rate cut in September. The question was about whether there would be a rate cut in September, and Powell said this very clearly. He said that if this decline in inflation continues, we will cut it. He said that if there is a problem with unemployment, we will cut it. So we are looking for an excuse to lower it, he said.

They were always talking about uncertainty before, now they are saying they will lower it. He did not answer the questions about how many reductions will be made by the end of the year. But now we have largely completed the inflation part of our mission. The statement that I am now focused on unemployment was basically this. Of course, this completely changes the game plan. We now see that the United States has won its fight against inflation. Of course, July and August inflation data will come by the September meeting. If bad things happen there, morale may be damaged. But on the other hand, I see that commodity prices continue to fall in the world. Oil continues to fall. The American consumer does not have a huge consumption power either. In this context, I do not expect a very serious upward inflation movement. In other words, I believe that the FED will be true to its word, and I think the first reduction will come in September. I estimate that the first reduction will be 25 points. The FED is trying not to make sudden moves, trying to be predictable, preparing the stock market in advance. In other words, it is necessary to accept that they have successfully managed their communication strategy in this regard.

In my opinion, they were late in reducing interest rates. Because of this, sectoral recessions have already occurred. There is a recession in automobiles. I always talk about a recession in eating out. There is a recession in housing, but the entire country has not entered a recession. Although economic activity has slowed down significantly, it is debatable how reliable employment data can be, but there is no major dissolution in employment, there is a weakening. In fact, yesterday Powell said the labor market has stabilized, just as I think he would say, and this balance has reached pre-COVID levels. In other words, there is now work in the market for every job seeker. But there is no opportunity there by far. This was the balance we were looking for, he said. In other words, the labor market has stabilized, we can turn a blind eye to that balance being disrupted a little more, but we don't want it to be disrupted too much. In other words, we don't want to create a big wave of unemployment. On the one hand, he said we want to wait a little longer because we don't allow inflation to run high. I don't think they need to wait, but of course I'm not in the position of those guys. They think they are doing the right thing for their own future and America's future, and we should appreciate it. In one way or another, inflation has decreased and the US has not entered a major recession as everyone expected, even if the economy has slowed down.

Now, what will happen in the upcoming period within this framework? First of all, the economic regime has changed. In other words, we are entering from a period of monetary tightening to a period of monetary loosening. A decrease in interest rates means that loans will be provided to the markets more easily, and the markets are not waiting for the FED in this regard anyway. There was serious loosening in both two-year and 10-year rates yesterday. Because the FED only reveals the indicator rate. The real interest rate is formed in the market and the markets have already priced a 75 basis point discount in the bond markets, we see that too. It is possible for economic activity to become more lively in an environment where interest rates are low. This will benefit small banks. Because, as you know, small banks had very large government bonds and the value of their low-interest bonds decreased with the increase in interest rates. It will benefit there, it will benefit all small companies. This will benefit startups that have difficulty finding financing. In other words, we are actually entering a positive period for all actors of the economy, until the interest rate cuts. Now, there is a concern here, some people think that when they look back, they see that stock markets fell after interest rate cuts. This is true, but the reason for those interest rate cuts was that the American economy was entering a recession. The interest rate cuts were perceived as the central bank accepting the recession. Therefore, even if interest rates fall this time, the markets may not. In other words, it is difficult to be sure of this right now, and we need to look at how the American economy is doing until then. For example, if there are very serious signs of recession from here to September, which I do not expect because the growth in the second quarter was quite reasonable. I do not think there is such an alarming situation in the third quarter yet. But if such a thing happens, the FED's interest rate cut may be perceived negatively, I think we are entering a recession. However, while the economy is performing a little lower with this performance, and employment is perhaps a little worse with this performance, if the FED says yes, we believe we have won the fight against inflation. Therefore, we are starting to reduce interest rates, another seriously positive period may open up for us. Of course, election uncertainty is a separate issue here. August usually tends to be not bad in election years. However, declines may occur in September and October, as we approach the election. Of course, we will see that each year has its own balances. Yesterday, we saw a little bit that the rotation in the stock markets was completed.

What do I mean by this, for example, technology stocks rose faster yesterday. Nvidia experienced a historic rise yesterday. It continues to rise today. The Meta balance sheet that came after the markets closed yesterday was also very, very positive. That also benefited Nvidia. Qualcomm brought a very positive balance sheet. There was a problem with ARM, but I think ARM has always been overpriced anyway. Today, after the closing, Amazon and Apple balance sheets will come, and if there is no big problem from them, we see that the technology side will recover. My prediction is that they are small stocks, but they will still increase faster until the end of the year. Yesterday, the market was trying to digest the events, in other words, we should not form too many opinions from the first day. Only Bitcoin did not enter the game at all. In fact, it fell after the interest rate decision yesterday. There are other factors at play in Bitcoin. I do not know if BlackRock is playing a game, or if America is stopping the market because it sold its bitcoins or if it is worried that it will sell them. But I still think that the abundance of money will basically pull Bitcoin upwards. That's why I didn't break my Bitcoin positions despite yesterday's decline, I will continue to grow them slightly. I think there will be a rally at least until the end of the year and that's my belief.

We may experience declines in the stock markets before the election. I believe that we are entering a period when money is abundant. When money is abundant, asset prices tend to basically go up. That's why I am positive about the markets until at least the end of the first half of 2025. There may be sharp pullbacks from time to time. There may be rotations, it is useful to be a little careful as we head towards the elections. Things can get a little messy there too. August is generally a weak month except for election years. It is a stronger month in election years. We will see its effects. Because big investors and forex managers go on vacation in America. That's why it is easier to play with the markets, sudden price movements can be made. Because big players cannot react because they are on vacation. All these will create fluctuations from time to time. That's why I never change my main strategy. From time to time, I go all in when I find the opportunity, when something is too much. For example, the other day I took advantage of the declines in Nvidia and Tesla and entered the market very seriously. Today I will take some profits from them.

So I am not breaking these main positions but I am continuing the trades and at the end of the day, that is, every two days, I want to switch back to cash at least 30%. Because I expect a volatile stock market, there will always be opportunities. So I say, let me keep 70% of my portfolio long and play with 30%. I will continue this strategy. Everything positive, of course, yesterday, Nvidia's recovery was good for the entire artificial intelligence market. Meta's statement that they are making a lot of money from artificial intelligence was also positive. Only ARM was already very expensive in my opinion, it is in a pullback. Microsoft had fallen sharply after the balance sheet the day before. It recovered yesterday, I think we can even switch to positive today. I am also following the balance sheets of Apple and Amazon with curiosity. There are geopolitical risks but I do not think they are very big. So yes, what Israel is doing is not nice, there will definitely be a reaction in the region, but right now, Israel is not in an all-out war with another big country. Israel is very protected and there is no such power in the region. I don't think that the factors supporting that power in the region, such as China and Russia, would want to go to war with America on such a front. Because going to war with Israel means going to war with America. It will be in the form of regional conflicts. So I don't see a big problem geopolitically. Of course, what is happening is terrible, feeling sorry for the people there is different. I am talking about the market.

The second issue is that if interest rates go down, the markets will go down. I am not ruling this out yet. Because there can be a disease in the markets such as repeating past behaviors. But if the FED, with the right communication and at the right time, says that this is not because of a recession risk, but because inflation has fallen so much, there is no need for such interest rates, I think we can overcome that problem and the third is of course the election issue, we see Harris recovering a little in the elections. I would like Trump to win, not Harris, in terms of the markets.

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