Morning Brief: Market Correction Deepens as “Bubble” Fears Hit Tech; All Eyes on Turkey’s Inflation Report

Summary:

Global markets are losing momentum as profit-taking and “bubble” concerns erupt across high-growth AI and technology stocks. Nasdaq is heading for its worst weekly performance in seven months, while Asia’s tech-heavy indices are showing heavy losses. The correction has spread across asset classes: gold, silver, crypto and oil are pulling back, and the dollar is seeing renewed demand ahead of year-end positioning. In Turkey, attention turns to today’s Central Bank Inflation Report, where investors expect clarification on 2025 inflation projections and policy direction.

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Tech Rout Accelerates: AI Mania Gives Way to Fear

The AI-driven euphoria that defined most of 2025 is unwinding.

• Nasdaq closed 1.9% lower overnight and is on track for a 2.8% weekly decline, the steepest since April.

• In Asia, risk aversion intensified:

  • Nikkei -2%

  • Kospi -3.3%

SoftBank — one of the largest global venture investors in AI and tech — has lost over 20% this week alone.

The pullback comes despite no specific catalyst, suggesting:

• Profit-taking after strong year-to-date gains,

• Year-end position reductions,

• “AI fatigue” and excess positioning,

• Renewed attention following Michael Burry’s warnings (nicknamed “Big Short 2.0” on social media).

For the first time in months, investors are openly debating the possibility of a tech bubble.

“This looks like a healthy reset after a parabolic move,” one fund manager said.

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U.S. Macro: Weaker Labor Data Boosts Bonds, Softens the Dollar

U.S. employment data indicates rising layoffs and a softer labor market.
That narrative increases expectations that the Fed may begin easing aggressively in 2026.

Market reaction:

• U.S. 10-year Treasury yields dropped ~10 bps

• Dollar weakened moderately

• EUR/USD briefly tested 1.1550

In the UK, the Bank of England held policy rates at 4%, with the committee split:

• 5 members: hold

• 4 members: cut

The vote breakdown implies that a rate cut in December is very possible following the release of the government budget later this month.

GBP/USD recovered from a seven-month low (1.30) back to 1.31.

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Gold, Silver, Crypto: A Correction — Not a Trend Change

Gold remains just below the psychological $4,000/oz level.

Short-term technical ranges:

The U.S. government added both copper and silver to its “critical metals” list this week, reinforcing the structural bullish thesis for precious metals.

Still, after a massive rally, gold and silver are consolidating.
The desk took profit and has not re-entered yet, waiting for better levels.

Crypto markets are also under pressure:

• Bitcoin fell below the 108,000–109,000 support range

• Now stabilizing slightly above 100,000 USD

If weakness continues:

“The 96,000–97,000 range would be a buying opportunity.”

The narrative is unchanged: dips remain buyable.

TURKISH Markets Report

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Opinion: A Healthy Pause, Not the End of the Bull Cycle

Recent risk-off sentiment is not viewed as the start of a downturn.

Drivers behind the correction:

• Dollar positioning into year-end

• Closing of USD short positions

• Natural fatigue in AI-linked megacaps

• Broad profit-taking across asset classes

From a strategic perspective:

“We continue to buy dips in gold, silver, crypto, and selected equities.”

A significant wildcard remains the U.S. administration:

• Trump favors a weaker dollar

• A Fed leadership change could accelerate rate cuts

Should that happen, the USD could weaken meaningfully in 2026.

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China: Export Collapse Signals Weak Global Demand

China’s October trade data sharply disappointed:

• Exports fell 1.1% YoY, the weakest since February

• Imports grew only 1%, the slowest pace in five months

The weakness reflects:

• Fading pre-tariff shipment rush to the U.S.,

• Weak global demand,

• Escalating trade tensions.

Despite a temporary one-year “trade truce”, Chinese goods are still subject to:

~45% average U.S. tariff rates.

China is now attempting to:

• Expand exports to alternative markets,

• Boost domestic consumption,

• Increase imports to avoid GDP drag.

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Oil Slumps Again: Oversupply and Weak Demand

Oil prices are preparing for their second straight weekly drop.

• Brent is trading around $63/barrel

• Weekly decline: ~2%

Bearish catalysts:

• U.S. crude inventories +5.2 million barrels

• Long government shutdown dragging on U.S. economic activity

• OPEC+ signaling production increase

• Saudi Arabia reducing selling prices to Asian buyers

“We expect to love oil again — in 2026.”

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Tesla Shareholders Approve Historic $1 Trillion Compensation Package

Tesla shareholders voted over 75% in favor of Elon Musk’s massive performance-based compensation plan — potentially worth $1 trillion.

Musk announced:

• A fully autonomous robotaxi ‘Cybercab’

• A new Roadster

• A super-scale AI chip factory

He described it as:

“Not just a new chapter… a new book.”

Tesla remains the stock market’s most expensive megacap based on price-earnings multiples.

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Turkey: Local Flows Stable, Focus Turns to Inflation Report

Weekly data from the Turkish Central Bank (TCMB) and BRSA indicate:

• Local FX deposits increased by $0.8bn
  (majority due to gold positioning)

• Foreign inflows: $1.1bn net

  • Equities: +$0.24bn

  • Local bonds (DIBS): +$0.49bn

  • Eurobonds: +$0.39bn

TCMB’s net FX position:

• Fell by ~$10bn from peak (due to lower gold valuations)

• Still viewed as a sufficient buffer against short-term risks

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Today’s Key Event: Central Bank Inflation Report

• Time: 09:30 (TRNC) / 10:30 (Türkiye)

• Speaker: Governor Karahan

Markets expect:

• Updated inflation forecasts

• Clearer communication on the 2025 target

• Possible acknowledgment that the current trajectory may not meet the previous projection

“This report will be critical for forward guidance.”

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Market Snapshot (08:30 TR Time)

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By:
Emre Değirmencioğlu
Group Manager — Treasury Department, Cyprus İktisat Bankası