Turkey’s currency and debt issues continue to be in the news, and short-term traders are reacting by getting cautious. Turkey currently has quite a bit of foreign currency and dollar denominated debt, and so as their currency continues to drop, these repayments become more and more of a burden. European banks continue to get whacked as they hold about $170 billion in Turkish debt – and not that Greece needs another problem, but they hold about 7% of this debt which is more than any other EU country. At this point investors are trying to determine to what extent this will affect U.S. markets. Many analysts are considering this a short-term issue for U.S. markets considering the strength of the fundamentals of U.S. companies, and that Turkey is only the 17th largest economy and the 32nd biggest trading partner with the U.S. The Dow finished off 125 points and closed down at 25,187.
One area of the market that is forecasting lower guidance is the housing market. During their earnings call on Friday, Redfin CEO, Glenn Kelman, said he believes the housing market is slowing down, especially in the hotter markets like Seattle, San Francisco, Portland, D.C, Boston, Chicago and Virginia. While inventory is still relatively low compared to historic levels, he believes that some buyers are opting to sit out for a while because they are getting tired of having their offers get beat. The stats show that fewer homes are selling in the first two weeks, and the number of homes decreasing their listing price is starting to increase. Even the Northwest Multiple Listing Service has said that “the days of multiple offers are days of the past”. Kelman also noted that home prices have now increased faster than wages for 70 straight months.
Elon Musk posted another statement on the Tesla website as some investors have filed a class action lawsuit against him and Tesla on Friday. He clarified that he has had a couple different talks with the board about taking the company private, prior to his August 7th tweet, and he believed that funding was “secured” as a result of many talks he’s had with the Saudi Sovereign Fund who have consistently approached him regarding taking Tesla private and have also recently bought $5 billion in Tesla stock. Currently the SEC is investigating Elon and Tesla for possible price manipulation and of course if they find any wrongdoing then this lawsuit will most likely be a slam dunk for investors. The current lawsuit does not actually provide any additional evidence of price manipulation or securities fraud.
As was reported over the weekend, Horizon Air had a plane stolen that eventually crashed on Ketron Island. While airline stocks were down a little bit today, Alaska Air was certainly down the most losing a little more than 2% for the day.