Our Comments and Expectations
External background. The S&P 500 bounced 1.5% yesterday, marking a second straight day of gains. Tech stocks led the rally, with the Nasdaq up 2.7%, while the more industrial Dow Jones added only 0.44%. The main market optimism once again came from the Fed and rate expectations: Fed Governor Christopher Waller signaled support for another 25 bp rate cut in December, noting that the labor market has “softened enough.” Earlier, another Fed official, Mary Daly, also supported a rate cut next month.
Today, the market awaits September retail sales data, where moderate growth is expected. Later this week, we expect updates on the Producer Price Index and durable goods orders. On Thursday, U.S. markets will be closed for Thanksgiving.
European indices showed more modest gains. DAX gained the most, though it remains near its lowest levels since May. Futures on Stoxx 600 are slightly lower at -0.25%. In Asia this morning, we do not see the same optimism as in the previous U.S. session. Chinese and Hong Kong markets are up 0.5–0.8%, while Nikkei 225 is neutral. S&P 500 futures are mostly unchanged. Oil is trading around $62.4.
Bonds. U.S. 10-year Treasury yields are declining for the third consecutive session, approaching the 4% mark.
KASE Index. The KASE index rose modestly by 0.26% yesterday. We currently see support near 6,690 points, which has been tested twice recently.
Index stocks. Halyk Bank led the market with a 2.5% rebound, helping offset recent market weakness in part caused by the stock itself. We previously noted that we expect gradual mid-term growth rather than quick jumps, and current prices look attractive for investment.
The market underperformer was Kcell — after a brief recovery alongside Kazakhtelecom on November 20, the stock quickly reversed downward. On the LSE and Nasdaq, all of our traded securities — except Air Astana — gained over 1%. Kazatomprom showed the strongest growth at +1.5%. The technical setup of its GDRs shows stabilization, lower volatility within a sideways channel, and early signs of a narrowing triangle formation — a moderately positive signal for the mid-term. Kaspi and Halyk Bank bounced from support levels.
KMG reported 9-month results with improved operating metrics despite weaker oil prices and reduced net debt by 2.5x to USD 904 million.
FX. The USD is trading around 518.8 KZT this morning. Changes over the past two sessions are minor, and USDKZT has not shown the rise we expected earlier. Meanwhile, the ruble is strengthening for the sixth straight session against the dollar. The DXY dollar index is at its highest since May this year.