Our Comments and Expectations
External Background. The S&P 500 quotes rose yesterday to historical highs, almost reaching 5690 points after the start of the Fed press conference at 11:00 PM Astana time. According to Jerome Powell, easing monetary policy could support the labor market. However, the market's stay at new highs was short-lived, as Powell later indicated that the regulator is in no rush and investors should not rely on further significant rate cuts. Some market participants referred to the classic phenomenon of "buy on rumors, sell on news," where the 50 basis point cut was the news. The market is currently pricing in an additional 70 basis points of rate cuts over the remaining two Fed meetings. Officials, however, forecast only half a point by the end of 2024. They have also factored in an additional percentage point for 2025, according to the average forecast. In Europe, major index quotes ended up in negative territory. Today, it is expected that the Bank of England will keep rates at 5%, with a potential cut in November. In Asia, Hong Kong's Hang Seng index is confidently rising by 2% and 3.5% over the last two sessions. In China, consumption has somewhat recovered during the Mid-Autumn Festival. Japan and Korea’s indices also showed significant growth. Oil has added 1.7% this morning and is trading at $74 per barrel for Brent. Reports of rising tensions in the Middle East are coming in, following a series of explosions in Lebanon and the announcement of a "new phase" on the northern front. Iran has threatened retaliatory measures after the wounding of its ambassador. US crude oil inventories decreased by 1.63 million barrels last week, reaching their lowest level in almost a year.
Bonds. The yield on 10-year US Treasuries jumped yesterday from the June lows of 2023. Emerging market bonds slightly decreased, while high-yield US bonds remained neutral.
KASE Index. The KASE index grew by 0.3% and managed to cross the 5200-point mark. Given this, it can be said that the index is slowly recovering, showing 4 positive trading sessions out of the last 5.
Stocks of the Index. Two stocks showed growth yesterday. First, there was the People's Bank of Kazakhstan, which, with yesterday's jump, made an attempt to break out of the sideways channel. At the same time, the bank's GDRs showed good growth, but after the LSE opening, they faced resistance at the 50-day moving average and bounced down. The second stock and the local market's leader in growth was Air Astana. Its quotes are nearing the downward trendline (starting from May) and are expected to test it soon. It is worth noting that the GDRs on the LSE missed the Fed press conference yesterday and thus were not affected by it. Meanwhile, Kaspi, which is traded on the NYSE alongside the US market, began to decline after midnight and eventually lost 3.7% for the session. It is likely that the GDRs today may show similar movements.
Currency. Yesterday, the tenge strengthened to 479 per dollar. Today, USD/KZT quotes are trading at 479.3 tenge on the forex market, and at 478.8 on KASE.