Our comments and expectations
External Background. The S&P 500 rose by 4% last week, marking its best weekly performance in 2024. On Friday, the increase was 0.54%. Notably, the Russell 2000 index, which tracks small-cap stocks, outperformed the three leading benchmarks—Dow Jones, Nasdaq, and S&P 500—with a gain of 2.5%. It is noted that stocks in this index are less influenced by mega-cap stocks, like Nvidia in the S&P 500, making them more sensitive to economic changes. The FBI reports that the U.S. Secret Service fired upon a gunman while Trump was playing golf at his club in Florida. The incident is described as "an obvious assassination attempt." An ABC News/Ipsos poll shows that Kamala Harris won the debates, but without significant impact, maintaining a lead over Trump at around 52%-46% among likely voters. An anticipated event this week is the FOMC meeting, where the market expects a rate cut of 25 basis points. There is also a small portion of those expecting a 50 basis point cut and those who believe the FOMC has already delayed easing too long amid a weakening economy. In Europe, major indices were also in positive territory and are on a path to recovery. The Stoxx 600 gained nearly 0.8%, the DAX rose by 1%, and the CAC 40 increased by 0.4%. In Asia, trading has been more neutral this morning. Reports indicate that China’s economy weakened in August, with production, consumption, and investment growth slowing more than expected. The unemployment rate rose to a six-month high, clouding growth prospects and intensifying calls for more aggressive stimulus. Oil is trading slightly below $72 per barrel this morning.
Bonds. The yield on 10-year U.S. Treasury notes has slightly decreased to 3.65% and is currently near its 14-month lows. U.S. high-yield bond ETFs reached their highest levels since June 2022. A similar situation is seen in emerging market bonds.
KASE Index. The KASE index rose by 0.6% on Friday, which exceeded our expectations. The quotes did not form an upward divergence on the 4-hour chart but moved up after entering the oversold zone on September 11. This doesn’t provide strong technical signals but still hints at a potential wave of growth from current positions.
Index Stocks. Friday was a recovery session for bank stocks, with prices rising after previously being in correction. The most significant decline was seen in the People's Bank (down about 10% from local peaks), but it is now showing the best recovery rates—with a 4% increase over the last two sessions. Air Astana led the declines. On the LSE and NYSE, stocks, on the contrary, showed an unexpected decline but without deep losses. As trading opens today, Kazatomprom shows the largest increase; however, it should be noted that uranium ETFs were in negative territory on Friday, suggesting local declines.
Currency. The dollar has risen against the tenge for the fourth consecutive session, again surpassing the 480 tenge mark today. This indicates that technically, the dollar has returned to the trajectory of a local upward channel.