Our comments and expectations
External backdrop. The S&P 500 fell yesterday even before the main session began and ended it down 1.2%. Oil continued its strong rally, jumping 5.8% in the session and once again moving above the round $100 per barrel level for Brent. Treasury yields accelerated higher: the 10-year reached 4.7%, the highest since January 2025. At the same time, corporate bond prices declined, breaking through key support levels. The dollar strengthened as the likelihood of Fed easing declined, which in turn weighed on copper and gold. A few days ahead of the Fed meeting, the money market is pricing roughly a 35% probability of a rate hike versus 10% a week earlier. A hike is fully priced in by September. Google fell 7.1%, Amazon — 4.6%, and Tesla — as much as 14.5%, as its profit declined despite strong EV delivery figures. Trump threatened to intensify attacks on Iran, holding the country responsible for any further strikes by Yemen’s Houthis on ships in the Red Sea. He also said he is considering a “large-scale attack” and is “close to making a decision” on the matter. Reports say the U.S. will impose tariffs of 10% to 12.5% on imports from most major trading partners. This morning the tone in Asian markets is negative: Japan and Korea indices are down 3–6%, while China and Hong Kong are down 1.4%. Oil is fluctuating around $100 per barrel this morning. S&P 500 index futures are down 0.1%.
KASE Index. The backdrop for KASE is turning negative again. Global sell-offs in equity markets are transmitted to the local market directly via GDRs and ADS, and indirectly via rising U.S. government bond yields. Nevertheless, some positive factors for certain companies are still present.
Index stocks. Yesterday, Kazatomprom shares were the biggest decliners. In London, they also fell 2.1%. The local picture has not changed materially, as the GDRs have been below the 200-day moving average for a little over a week. On the other hand, the chart for uranium futures looks interesting: thanks to a modest but still positive move in prices, the technical picture shows futures breaking upward out of a long triangle. This could be a decent medium-term bullish signal. Weakening of the tenge after Bank of America withdrew its recommendation to buy it could also support gains. Pressure on the market today may come from Kaspi shares, which lost 2.6% on Nasdaq yesterday and broke down out of a local consolidation. Solidcore shares rose nicely on AIX; however, a decline in gold prices could become a hurdle to further gains in the stock — we are watching for now.
FX. The dollar is rising to 477 tenge today. Yesterday, BofA closed long positions in the tenge and four-year bonds, explaining that risks related to disruptions in the CPC pipeline, as well as the tenge’s overvaluation, no longer allow the bank to recommend buying the Kazakh currency.