External Background: The S&P 500 showed minimal gains yesterday. The focus was on the U.S. Job Openings and Labor Turnover Survey (JOLTS), which decreased to 8.06 million in April (down from 8.36 million the previous month), marking the lowest level in the last three years and indicating a gradual slowdown in the labor market's growth rate. Furthermore, this figure was below all forecasts from economists surveyed by Bloomberg. Job openings in healthcare fell to their lowest level in three years, and vacancies in the manufacturing sector hit a minimum not seen since late 2020. The demand for government jobs also weakened. However, this time the principle of "bad news is good news," which has worked in the market for the past year, did not lead to a rise in stocks, even though traders began pricing in the first Federal Reserve rate cut for November instead of December, as was the case the day before. The main impact of the report was felt in defensive government bonds, whose yields fell. This indicates that, for investors, concerns about economic slowdown outweighed the prospects for declining inflation and a loosening of the Fed's policy. Indices in Europe performed worse than in the U.S., with Stoxx 600 and DAX decreasing by 0.5% and 1%, respectively. Unemployment in Germany rose more than expected. Asian markets opened mixed, with the Korean Kospi growing well while the Japanese Nikkei 225 fell. Copper dropped another 2.8% yesterday (-11.2% since May 21) following news that inventories on the Shanghai Futures Exchange reached their highest level since 2020.
Bonds: The yield on 10-year U.S. Treasuries fell to the lows seen on May 16. Meanwhile, corporate bonds remained stagnant, indicating a flight to safety among investors.
KASE Index: Another neutral session was added to KASE. Despite our expectations of moderate local growth for the index, the weakness of our stocks on Western exchanges may hinder this today.
Index Stocks: On KASE, the biggest growth yesterday was observed in Kaspi's stocks; however, they dropped by 2.6% on the NYSE. We noted yesterday that the growth momentum for ADS is weakening, which was reflected in the results of yesterday's session. Kazatomprom lost 1.5%, but we recommend paying attention to the levels of $39.4 and $37.8 for potential buying, as we believe the correction of the stock is somewhat unjustified; moreover, the weakening tenge is a positive factor for the company. Air Astana's GDRs fell by 3%, offsetting their gains on Monday. Only the Halyk Bank remained neutral, currently positioned around the middle of its sideways trend on LSE.
Currency: Yesterday, the dollar rose to 448.5 tenge. This morning, forex quotes are fluctuating, showing attempts to buy back tenge down to 447.25. We remind you that in the last six sessions, the dollar has strengthened against the backdrop of the tax period ending, the start of the holiday season, and announced reduced volumes of currency sales from the National Fund.
Key Market News:
(=) AIRA: Air Astana provided information on transactions with its own securities from May 28 to June 3.