Stocks rebounded today as the Turkish Lira gained some strength by recovering about 6% of its value. The Dow moved up 112 points and closed at 25,299. The U.S. does not hardly have any exposure to Turkey, most of the concern has been about how much exposure does Europe have to Turkey and as a result how much of a lingering affect will that have here. Today, investors were more optimistic as the Finance Minister from Turkey said that he would have a conference call to ensure investors that President Erdogan has a handle on the economy. In addition, President Erdogan said that Turkey will be offering further incentives for investment in their economy.
With all the concerns abroad, institutional investors are shifting away from global equities and piling money into U.S. stocks. A Bank of America Merrill Lynch Fund Survey looked at 243 fund managers that have portfolios worth $735 billion, and found that they now have their largest percentage of U.S. stocks since January 2015. They do have some reservations though as cash holdings are now at 5%, up from 4.7% last month, and a 10 year average of 4.5%. These investors are also betting against bonds as interest rates continue to move up.
Home Depot reported earnings this morning and added to the narrative of a strong economy. Expectations were exceeded as earnings were 7% higher than analyst’s expectations and 33% higher than last year. Revenues were just over $30 billion, 400 million higher than expected, and 8% higher than the previous year. The average customer spent 5% more on their purchases as they are seeing more people invest more in the home they own. Home Depot continues to see good sales for the rest of the year and the stock price is now up about 25% for the year.