EM currency contagion fears and US equity resilience
The Turkish lira lost approximately 35% against the US dollar in 47 days. Erdogan refused to raise rates. Contagion fears briefly hit EM currencies and European bank stocks, but the S&P 500 lost only 0.25% for the week of August 10 and recovered within days.
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ALAN INTELLIGENCE · alanglobalintelligence.com
ALAN IntelligenceData as of 2026-08-30
Bars: median S&P 500 forward return. Whiskers: 25th-75th percentile. n = 1 occurrences.
Based on 1 historical occurrences. Last triggered: 2018-08-10.
Past performance is not indicative of future results. This material is for informational and educational purposes only and does not constitute investment advice, an offer to buy or sell any security, or a recommendation. Data from publicly available sources believed to be reliable but not guaranteed. All investments involve risk, including possible loss of principal.
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ALAN GLOBAL INTELLIGENCE · alanglobalintelligence.comSource: S&P 500 daily closes · Generated 2026-08-30
Historical occurrencesshowing 1 of 1
Date
1M return
1Y return
5Y return
2018-08-10
+1.9%
+3.3%
+56.6%
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
EM currency crises rarely transmit to US equities
The S&P 500's largest daily decline measured under 1%. This pattern repeated across the 1997 Asian crisis, 1998 Russian default, and 2015 yuan devaluation.
European banks were the actual contagion channel
Banks with Turkish loan exposure fell 2-4%. S&P 500 holders had no real exposure.
Unorthodox monetary policy is the common denominator
Turkey's crisis was self-inflicted: Erdogan's refusal to raise rates destroyed central-bank credibility.
For your portfolio
Single-country currency collapses have consistently stayed local unless leverage connects them outward — the lira crisis clipped European banks holding Turkish loans while the S&P 500 barely moved. If EM currency risk is on your mind, the review belongs in your international allocation, screened for countries running unorthodox monetary policy.
For information and research only. Not investment advice. ALAN does not place trades or execute orders. Figures come from the sources shown and can lag the market; verify independently before making decisions. Past performance is not predictive of future results.
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ALAN is not a broker-dealer or investment advisor. All data is informational only and does not constitute investment advice. Past performance does not guarantee future results.