Powell had a speech yesterday, it stirred up the markets a bit. Contrary to expectations, Powell talked about two 25 basis point cuts by the end of this year. We don't have a predetermined program for cuts, but when we look at the American economy right now, we see it as strong. Yes, the labor market is cooling down a bit, but he said there is no need for such urgent cuts again. I hope he doesn't take his word for it. The markets were initially shaken, they found this speech negative. But then they recovered. Because if Powell is right in what he says, it means that a soft landing is possible for the American economy without the need for extremely rapid cuts. Of course, whether Powell will be right or wrong, remember his speech in July, then he had to make 50 basis points, we will see that in the coming days. But the market first shook and went down. Then it went up again.
As I mentioned in my weekly review article yesterday, there will be a lot of FED speakers this week. All these speeches may move us up or down from time to time. But what is important is not those speeches but the data flows that will come. As I mentioned in my article yesterday, there is a lot of data flow this week, especially about employment and economic growth. Bowman from the FED also gave a speech yesterday. He was a bit more hawkish, he said he believes in 25 basis points more. We already know that he was the only person who opposed 50 basis points at the last FED meeting. In addition to these, Chicago's PMI came yesterday. The market was expecting a slightly higher than expected 46.1 manufacturing PMI, but it came at 46.60. This supports my thesis that things may be slowly turning up in manufacturing. But the real manufacturing PMI is coming today.
Jolt is also coming today. It will show the number of positions open to employment in America. The expectation there is 7,640,000, let's see how much above - below it will be. It will affect the market again. It is very likely that the manufacturing PMI will come below 50, but my hope here is that it will continue to curve upwards a little. The expectation was 47.6, the last was 47.2. This would be a correct trend. I wish we could find 48, even better. Because in this case, when combined with Powell's speech yesterday, the theory of a soft landing without the need to cut interest rates excessively comes into play. Those who say recession is bound to be a little disappointed there. But the more important news is of course China, which is currently affecting the markets. Since China has been implementing monetary expansion, Chinese stock markets showed historic increases yesterday. There is an increase between 8% and 10% in the indexes. There are also much better performances in terms of stocks. Since I am not a China expert, I follow what Wall Street experts say about China more. But I guess it would be useful to be a little more careful now. Because China has made such rapid increases before and then brought sharp decreases. Yesterday's increases were extremely sharp. Today is a holiday in China, so the stock markets are closed, we cannot watch the continuation today. It would be useful to be a little careful about that.
As you know, Nikkei had fallen by almost 5% the day before. It is currently recovering today. The reason for the decline is that the new prime minister may be in favor of a little more tightening. Today, the markets have started to price in that they can't do much. There are increases especially on the industrial side. There is also a small movement in the Japanese Central Bank regarding monetary expansion, transferring funds to certain areas. These have also eased that market a bit. In other words, there is no news that will scare the American markets or the global markets right now. Things seem to be going positively, so we closed September on a positive note. August and September are historically difficult months. Both closed positively. The increase in September approached 2% with the Nasdaq and S&P 500 increases that came at the last minute yesterday. It had fallen while Powell was speaking, then we went back down.
Another news that is currently occupying the markets is the dock workers' strike in America. Workers working in ports on the East Coast are going on strike. Nearly 47,000 workers are going on strike. By the way, they are making very good money. I also learned today. It seems that the average dock worker earns around $150,000. Their basic salary seems to be around $70,000. There are those whose hourly income is as high as $60. On top of that, there are very high salaries due to factors such as overtime and riskier work. In fact, negotiations between the employers' unions and the workers' unions in that area have been going on for a long time. They did not get anywhere and as of October 1, nearly 47,000 workers went on strike. On the other hand, the west coast is still open. The opposite happened before, the west coast went on strike and work continued on the east coast.
The East Coast is more important in terms of ports. 60% of imports and exports to America occur from there. First of all, we have to hope that it doesn't take too long. Because right now, as we are entering an election year, I don't think Biden will allow this to go on too long. Because these types of restrictions on imports can have an impact on inflation and product shortages can occur, and shelves can be emptied. We know right now that transportation costs have started to increase immediately. Because instead of unloading goods on the East Coast, ships have to go around the West Coast. This will definitely put pressure on inflation. It is currently estimated that each day of this strike will cause a loss of around 4-5 billion dollars to the American economy. I think it won't last long. By the way, the money earned by the port workers is not bad either. I think this seems to be getting somewhere with a little more bargaining.
Which stocks benefited from this as of yesterday? Of course, the stocks of companies such as those doing air transportation; FedEx and UPS climbed. On the other hand, the stocks of railway companies fell. Because trains are used to transport products coming from these containers into the country. It is predicted that there will be a decline from there. The automotive sector may be slightly negatively affected by this. Especially those that depend on imports in America. Because there is a problem with the flow of goods and parts. I hope this strike will not last too long. For now, the market is not taking it too seriously. Because when a similar situation occurred on the West Coast before, an agreement was reached within a week. In other words, such a quick agreement will not upset the markets too much and we will continue on our way. But if it lasts, of course, it will have both an inflationary effect and it will be difficult for manufacturing companies in America to access supply. Supply chain disruptions may come into play. Remember the effects of this during the Covid period.
Apart from this, there is news about companies that came yesterday. Google and Apple were sued by Epic Games. Epic Games claims that these two companies received excessive commissions through their app stores and crushed Epic Games. It is a bit difficult to know where that case will go. There were a lot of rumors about Apple saying that demand for iPhone 16 Pros was low. A report came out yesterday from Morgan Stanley in the opposite direction. That also pushed Apple stock up rapidly. So the markets are going through their normal ups and downs at the moment. There doesn't seem to be anything that will cause them to move too much either up or down. We'll continue to watch the coming days. As you know, my basic stance is that money is starting to become abundant, this cannot be stopped. As money becomes abundant, if you are holding onto the right assets, their prices will go up.
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