Our Comments and Expectations
External Background: U.S. stock indices showed a slight recovery yesterday amid investors' anticipation of the upcoming earnings season and macroeconomic data. The S&P 500 rose by 0.14%, and the Nasdaq gained 0.27%. This occurred despite increased pressure from Trump over the weekend in trade negotiations, when the U.S. President announced a 30% tariff on the European Union and Mexico starting August 1. The EU, in turn, extended its pause on retaliatory measures until early August. Today, Tuesday, marks the start of the earnings season, traditionally kicked off by the banking sector. Another key market event will be the release of June inflation data. Annual inflation is expected to rise from 2.4% to 2.7%.
European indices showed a slight decline, most likely due to Trump's statement regarding the 30% tariffs on the EU. The European automotive sector, which is sensitive to tariffs, saw the most notable drop. In Europe, the earnings season will begin on Wednesday, with a report from Dutch semiconductor company ASML — a key player for the market. Oil traded around $69 yesterday, declining by 2% after Trump granted Russia a 50-day delay before new sanctions are imposed on buyers of Russian oil, provided that no peace deal is reached.
Bonds: The yield on 10-year U.S. Treasuries rose slightly to 4.44%. Emerging market bonds remained mostly unchanged in price.
KASE Index: The KASE index declined by 0.8% on Monday. Despite the seemingly sharp drop, most of the decrease was due to a dividend gap in Kazatomprom. Overall, the decline can be seen as a technical correction, given that the index has been in overbought territory in recent weeks. The overall uptrend remains largely intact.
Index Stocks: The main factor in the decline was Kazatomprom, which showed a dividend gap as the last major event of the dividend season. In London, the price drop was more modest — just 2%. Investors there were actively buying the stock throughout the session, despite a decline of up to 6% at the open.
KazMunayGas showed a noticeable decline for the second day in a row, pulling back from historical highs amid falling oil prices. BCC shares also dropped 0.5%, again showing relatively high trading volumes.
Among the leaders were Air Astana shares, which bounced slightly off their recent lows and horizontal support.
Currency: The USD/KZT rose slightly again yesterday after reaching April highs. If the growth continues today, we may soon see a return to historical highs in the exchange rate.