External Background: The S&P 500 index rose by 0.25% yesterday, closing at 5,321 points, marking a new market high (though intraday highs were slightly above this level). Leading the growth were parts of the financial sector, which includes large investment banks, Tesla, which increased by 6.7%, and Lilly & Co from the biotechnology sector, which added 2.5%. Yesterday's session was marked by another speech from Fed officials, where Christopher Waller stated that ongoing easing data over the next three to five months would allow the Fed to consider the possibility of rate cuts by the end of 2024. Today, the market will pay particularly close attention to Nvidia's earnings report, as a central supplier of hardware for AI service development. According to Goldman Sachs, Nvidia's report may increase volatility that investors are preparing for in the U.S. market. This is due to the fact that the bank's risk appetite indicator reached its highest level since 2021 last week, but the pace is beginning to slow down. In Europe, indices showed moderate declines. This morning, Asian indices also did not exhibit bullish sentiment, with the Nikkei 225 index recording the most significant decline at -0.8%. Oil fell by 1% yesterday and is down another 0.75% today, starting to test the support level around $81.6. Uranium increased by 0.7%, reaching $92.15 per pound.
Bonds: After testing the 50-day average, the yield on 10-year U.S. Treasury bonds decreased, which currently indicates the strength of this resistance level.
KASE Index: KASE rose minimally yesterday and is adding 0.2% at the opening today. BCC emerged as a leader in growth, which we noted earlier.
Index Stocks: Without BCC, the market overall showed a moderately negative session due to the decline in Halyk Bank shares. The trigger was likely a correction in the shares after testing resistance levels on the LSE, which also reflected on KASE. Notably, our observations show that the price difference between GDRs and local shares is currently elevated, around 5% in favor of local shares. Today, at the market's opening, the number of stocks in the positive zone significantly outnumbers those in decline (7 vs. 3). Among the laggards is KEGOC, which is down 4% at the moment due to the shareholder registry fixation on May 24 for dividend payment. Recall that under T+2 trading mode, the shares sold today will effectively leave shareholders' accounts two days later (on May 24) by the evening, while the registry fixation will occur on the same day but after midnight (the night of May 23 to 24). Shares of Bank CentrCredit are rising today by 2% and are updating their highs since 2007. This confirms our assumptions about the possibility of local growth in the shares. The laggard has been Air Astana shares, which are under pressure from their 50-day moving average. Recently, the company released its quarterly report, showing significant revenue and passenger traffic growth, but operational expenses also increased, reducing EBITDA margins.
Currency: On the USD/KZT chart, there are no significant changes, with the dollar trading at 442 tenge this morning. In Russia, the ruble is strengthening against the dollar amid the tax period.
Key Market News:
(=) KMGZ: KazMunayGas extended its oil supply contract to Germany.