Home Stocks The stocks that look ripe for buying after a Turkish trouncing — and those to avoid

The stocks that look ripe for buying after a Turkish trouncing — and those to avoid

12 min read

How do you solve a problem like the lira?

Turkish President Recep Erdogan’s solution is apparently to crack down on “economic terrorists on social media.”

Strategists, on the other hand, see four options for the country’s leaders — hike rates, peg the currency

USDTRY, -7.8930%

 , accept an IMF bailout or go with capital controls.

As traders around the world rubberneck, the beaten-up lira

TRYUSD, +8.5694%

is managing to stabilize somewhat in recent trading, and stocks worldwide are rallying after their recent Turkey-inspired trouncing.

So what’s the next move for investors?

“For those in the asset-allocation business, it’s probably a good time to add a little exposure to international equities and lower exposure to U.S. equities,” say Bespoke Investment Group’s analysts for our call of the day.

They’ve come to that conclusion after looking at 22 ETFs that track overseas stocks. In other words, funds that American investors use to gain exposure to the rest of the world, from the Vanguard FTSE Emerging Markets ETF

VWO, +0.35%

to the iShares Europe ETF

IEV, -0.22%



Moving into the green band means “oversold.”

It’s not a pretty picture for these ETFs, but the selling looks increasingly overdone, according to Bespoke’s team.

“13 of 22 ETFs have moved lower into oversold territory over the last week, meaning they’re more than one standard deviation below their 50-day moving averages,” the analysts write, referring to a sizable move under a key chart level.

Bespoke’s crew isn’t alone in seeing a buying opportunity. However, MarketWatch’s Mark Hulbert, for example, spots a chance to buy U.S. stocks rather than venture abroad.

To be sure, the Bespokers aren’t shying away from the ugly action by international equity ETFs, even as they sound bullish. These funds look “stuck in the mud,” as they’re in the red on a year-to-date basis and over the last week, the analysts say.

Read more: Trump poured jet fuel on Turkey’s currency crisis

And see: Why Turkey’s currency crisis is rattling European bank stocks and the euro

Key market gauges

Futures for the Dow industrials

YMU8, +0.27%

 , S&P 500

ESU8, +0.49%

and Nasdaq-100

NQU8, +0.46%

are higher, after the Dow

DJIA, +0.46%

 , S&P

SPX, +0.63%

and Nasdaq Composite

COMP, +0.62%

lost ground yesterday.

It’s been mostly gains for Europe

SXXP, +0.00%

and Asia. Oil

CLU8, -0.10%

and gold

GCZ8, +0.06%

are rising, while the dollar index

DXY, +0.48%

is little changed. Bitcoin

BTCUSD, -3.86%

is trading around $6,000.

See the Market Snapshot column for the latest action.

The chart

Marc Chandler

Turkey’s currency shouldn’t be getting all the attention, suggests our chart of the day from Marc Chandler at Brown Brothers Harriman.

“The euro

EURUSD, -0.5959%

appears to have carved out a head-and-shoulders top," the veteran strategist writes. He’s referring to a chart pattern that’s viewed as a sign of an upward trend’s end.

Other strategists are also sounding bearish, saying: “If the safe-haven bid continues, the euro will remain under pressure.”

The buzz

Elon Musk teased more details about his plan to take Tesla

TSLA, -0.68%

private, tweeting Monday night that he’s working with Goldman Sachs and Silver Lake.

Mark Mobius says capital controls in Turkey are a “real possibility,” and they would be a “very, very bad example for other emerging markets.”

Mark Cuban is opting for cash instead of Twitter shares

TWTR, +0.63%


Beijing’s latest data dump suggests the Chinese economy is facing increased headwinds amid rising trade tensions with the U.S.

Many Uber drivers are taking unnecessarily longer routes to drive up fares, though it’s the ride-hailing company that’s responsible for covering the bigger bill.

The companies that posted earnings ahead of the opening bell included Home Depot

HD, -0.40%

 , Advance Auto Parts

AAP, +7.73%

and Tapestry

TPR, +13.48%

 , the parent for Coach and Kate Spade.

Small-business optimism has hit its second-highest level in history, while prices for imports and exports also arrived before the bell.

Check out: MarketWatch’s Economic Calendar

Police in London today detained the driver of a car that crashed into barriers outside the U.K. Houses of Parliament, injuring pedestrians in a suspected terror attack.


NVDA, +1.51%

has announced the first products containing a long-awaited new generation of graphics technology.

The quote

“She has a clear vision to champion free trade, develop a sound immigration policy, fix America’s crumbling infrastructure, and support students from classroom to career.” —The U.S. Chamber of Commerce backs Democrat Mary Glassman for Connecticut’s 5th congressional district.

It’s a rare move for the Chamber to weigh in on a Democratic primary, Politico reports. The endorsement comes as business groups battle with President Donald Trump on trade, immigration and more.

Connecticut, Wisconsin, Minnesota and Vermont are hosting elections today as primary season winds down. Trump supports Wisconsin Gov. Scott Walker, tweeting that voters should back Walker in the Republican primary because he “brought the amazing Foxconn

2354, -1.85%

to Wisconsin with its 15,000 jobs — and so much more.”

Random reads

Vienna, Austria’s capital, now ranks as the world’s most liveable city, topping Melbourne.

457 people with electric guitars try to break a record — here’s their sound.

Wanted: Someone who will move to an island “paradise” and care for 55 cats.

Here’s why employees shouldn’t be expected to check their email after hours.

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