Our Comments and Expectations
External Background. The S&P 500 declined by 0.4% yesterday. Some major companies, such as Microsoft, Amazon, and Meta, posted gains, while the rest of the tech sector and healthcare stocks declined. It was reported that Trump sent letters to 17 of the largest pharmaceutical companies, urging them to lower prices on U.S. products. Inflation data came in moderately positive: the core Personal Consumption Expenditures (PCE) index rose by 0.3% compared to May. On a yearly basis, the figure stood at 2.8%, higher than in June 2024, indicating limited progress in curbing inflation over the past year. The data also showed a slight increase in inflation-adjusted consumer spending last month. Initial jobless claims remained virtually unchanged last week. Today, the focus will be on the monthly Non-Farm
Payrolls report: private-sector job growth is expected to come in at 100,000 after the weakest gain in eight months. Employment growth is likely to slow after the increase in June, while the unemployment rate is expected to rise to 4.2%. European indices also closed lower yesterday. This morning, the correction continues after Trump announced new tariffs: 35% on some Canadian goods, 39% on Swiss goods, and 15% on goods from New Zealand. In Asian markets, Hong Kong’s Hang Seng is falling for the third straight session, the Kospi is down 3.9%, and the Nikkei 225 has dropped by 0.7%.
Bonds. There was little change in the bond market yesterday. This morning, the yield on 10-year U.S. government bonds stands at 4.38%.
KASE Index. Yesterday, the index posted its sharpest drop since entering a sideways trend on July 14. As trading opened today, quotes declined another 0.7%. The lower boundary of the local sideways trend may shift downward, so the current drop is not yet sufficient to signal a full reversal. Nevertheless, the market situation is mostly seen as a correction of overbought conditions.
Index Stocks. During yesterday’s session, Kaspi and Kazatomprom weighed down the index. Both stocks also declined on foreign exchanges — Kazatomprom’s GDRs fell by 3.7%, and Kaspi’s ADSs dropped by 3.8%. We did not observe any major news triggers behind this decline. Kazatomprom reported operational results for Q2 today, while Kaspi will publish its final results on August 4. In today’s session, both stocks are again declining and stand out from other index components, which are showing losses in the range of 0.1% to 0.7%.
Currency. This morning, the dollar is up by 0.85%, which would normally be considered a notable increase, though prices are still below the highs seen on July 25. Today, data was released on August sales of foreign currency from the National Fund — the expected volume is $400–500 million, significantly less than the $700 million sold in July. The National Bank is likely reducing sales due to the August tax period.