Our Comments and Expectations
External Background. The S&P 500 fell by 1.3% on Friday. After five consecutive sessions of growth, the main U.S. stock market index corrected to levels last seen on October 17. The key negative factor driving the markets is the decreased probability of a Federal Reserve rate cut in December by 25 basis points, with approximately equal chances for and against. Susan Collins, President of the Boston Fed, stated that a rate cut in December remains uncertain. Austin Goolsbee agreed with Powell, stating that policymakers are in no rush to lower borrowing costs. On the index chart, technology companies stood out with a bright red spot. Healthcare sector stocks were also hit. Banks and the defensive utilities sector performed relatively well. According to Michael Hartnett from BofA, China is expected to ease fiscal policy, and the European Central Bank (ECB) will "aggressively" cut rates in anticipation of tariff hikes by Donald Trump, which could attract investors to the region. Economic news highlights include a 0.4% increase in retail sales in October, exceeding expectations. Import prices rose by 0.3%, while industrial production dropped by 0.3%. In Europe, indices showed moderate declines. The UK economy cooled more than expected in the last quarter, with GDP shrinking by 0.1% in September (the consensus forecast was for a 0.2% growth). In the morning, we observed moderate declines in Japan and China, but gains in South Korea. Oil is trading near the October lows, slightly above the $71 mark.
Bonds. On Friday, bonds showed neutral dynamics. The yield on U.S. 10-year Treasuries was 4.44%.
KASE Index. On Friday, the KASE index ended the session with a slight change, indicating a slowdown in correction dynamics. However, given the previous growth wave, the possibility of a local market decline remains.
Index Stocks. The performance of individual stocks in the local market showed no significant price changes. The biggest gain was for Kcell, which took a pause in its growth after reaching historical highs. Among GDRs, the biggest increase was observed in Kazatomprom. Uranium prices rose by 4.6%, while uranium ETFs failed to maintain their gains during Friday’s session and closed neutrally. The trigger for this was Russia’s decision to temporarily limit the supply of enriched uranium to the U.S. in response to the U.S. restrictions on uranium imports for 2024–2027 and a ban starting in 2028 on Russian uranium products. It is noted that 19% of the U.S. electricity supply comes from reactors using enriched uranium, creating risks for utility companies. The biggest decline among GDRs was for Air Astana, whose shares again failed to break through the 50-day moving average. Kaspi remained neutral amid news of its withdrawal from the privatization of Uzbekistan’s Humo payment system.
Currency. With the start of the tax season, the tenge failed to gain support and weakened against the dollar, approaching 498 today. We expect that the National Bank will soon move from verbal warnings to actual interventions in the currency market.