Our comments and expectations
External background. The S&P 500 closed flat again as investors await key earnings reports. Tech companies, especially chip and semiconductor manufacturers, were in the red yesterday. Meanwhile, financials, healthcare, utilities, and real estate sectors saw gains. This supported the Dow Jones (+0.4%) and Russell 2000 (+0.8%), which outperformed the broader market. According to Bloomberg Intelligence, the “Magnificent Seven” are expected to post a combined earnings growth of 14% in Q2, while the rest of the S&P 500 is forecast to remain relatively flat. Microsoft found itself in a difficult situation after a cyberattack: a vulnerability in SharePoint caused global data leaks and, reportedly, even affected the U.S. Nuclear Weapons Agency. A major trade-related development came from Asia: Japan and the U.S. reached a trade deal involving $550 billion in investments into the U.S. and a 15% tariff on Japanese imports—lower than the previously expected 25%. As part of the agreement, Japan will purchase 100 Boeing aircraft, increase rice imports, and boost defense spending in cooperation with U.S. firms.
In Europe, the DAX fell by 1.1%, hitting its 50-day moving average. In Asia, Japan’s Nikkei 225 is up 3.7% this morning on news of the agreement. Hong Kong’s Hang Seng is gaining 1.2%, reaching its highest level since November 2021. Oil prices are slightly down at $68.5, with support at $68.1—aligned with the 50-day moving average.
Bonds. Yields on 10-year U.S. Treasuries continued to decline, reaching 4.34%. Corporate bonds are also rising.
KASE Index. The KASE Index rose for the fourth consecutive session, updating its all-time high for the 11th time this July.
Index stocks. KazMunayGas rose by another 2.7% yesterday, likely due to its export-oriented operations and dollar-based revenue amid a weakening tenge. Since its IPO, the stock has gained 122%. Kaspi shares also rose 2%, though in the U.S. market they closed flat for a second session. Kcell increased by 1.1%, but resistance levels were not broken. On the LSE, Kazatomprom dropped by 1.8%, but remained within the local consolidation range. As of this morning’s session open, the index is up by another 0.4%, with most stocks in the green—including KMG (+1%) and Halyk Bank (+1%). The latter is especially notable, as HSBK shares are signaling a continuation of growth.
Currency. The dollar closed above our expectations yesterday, giving momentum to the market today. In the morning, USDKZT reached 540, where it is facing resistance, possibly due to market efforts to slow the dollar's rapid rise. Compared to last week, the situation has clearly worsened: demand for foreign currency is high, which may require intervention from the National Bank.