Our comments and expectations
External background. The S&P 500 rose 1.25%, recovering most of the day before yesterday's drop. Growth occurred in almost all sectors except energy and regional banks. Meta gave a forecast of revenue growth that exceeded market estimates, while announcing that it would pay the first-ever quarterly dividend of 50 cents per share and allocate an additional $50 billion for repurchase. Amazon reported strong sales and presented an operating profit forecast that exceeded forecasts. Initial applications for unemployment benefits confirmed the cooling of the labor market, which was previously shown by ADP data, reaching a two-month high. Further on Friday, investors' attention will be focused on the number of jobs in the non-agricultural sector, which is likely to show an increase of 185 thousand, which is less than the high 216 thousand in December, and the unemployment rate may rise to 3.8%. The ISM manufacturing index unexpectedly rose in January to a 15-month high of 49.1 from a revised 47.1. In Europe, the Stoxx 600 began to decline, showing -0.4%. On the contrary, the German DAX rose by 1.3%. Consumer prices in Europe slowed to 2.8% year-on-year from 2.9% and fell by 0.4% month-on-month. In Asia today, the movement is multidirectional, especially the Korean Kospi stands out, which showed an increase of 4.6% in 2 days. Oil dropped below $80 and fell to the level of the 50-day moving average.
Bonds. The yield on 10-year U.S. government bonds fell for the fourth consecutive session. The indicator at the end of yesterday's session was 3.88%.
The KASE index. The KASE index rose slightly yesterday, showing the second session of growth after the test of the 50-day average. Kazatomprom became a bright spot on the market, which grew after the data on production activity.
Index shares. Kazatomprom's GDR increased by 10.1% yesterday, and shares on KASE – by 3.4%. The growth was accompanied by the publication of operating results for the 4th quarter. The company showed production growth relative to 2023 and the previous quarter, which was generally expected. However, it lowered its production forecast this year by 12-14%. The new forecast for uranium production in 2024 is 21-22.5 thousand tons. Kazatomprom noted that there is still a problem of the availability of sulfuric acid, which is necessary for operational activities. It is noteworthy that at first glance the news looks negative for Kazatomprom, but positive for uranium prices, but during yesterday's session it was Kazatoprom that began to grow first, and uranium jumped by 5.1% closer to its completion.
Currency. The dollar is breaking through the 50-day moving average today. This is a clear technical signal for a wave of dollar growth, despite the fact that we will have a tax period ahead. Yesterday it became known that the National Bank will sell 600-700 million USD, which was within our expectations, but it also became known that the volume of currency purchases for the UAPF will grow to 400-600 million USD. It turns out that net sales from the National Fund will amount to only about $200 million, which is much less than in previous months.
Key market news
(+) KZAP: Kazatomprom's operating results for the 4th quarter of 2023.