Our comments and expectations
External background. The S&P 500 continued to show a decline in 2024 after the hawkish Fed minutes. The index lost 0.8% yesterday and 1.6% in the last 3 sessions. The NASDAQ dropped 1.2% when the energy sector papers and yesterday's leaders in the healthcare sector looked the best. The Russell 2000 index of small-cap companies recorded the worst drop since the March banking crisis. In the minutes of the last meeting, representatives of the Federal Reserve System said that rates could remain restrictive longer than expected last month, while noting that a rate cut could occur before the end of the year. As data released on Wednesday showed, the Institute for Supply Management's production index reached 47.4 last month. The index remains below the 50 level, indicating a decline since the end of 2022. Separate data showed that the number of vacancies in November decreased slightly compared to the revised figure of the previous month, which is a sign of a softening of the labor market situation. In Europe, the Stoxx 600 also began to show a reversal, down 0.9%. The DAX fell 1.5%. In Asian markets, indices are losing 0.2-0.8%. In China, the report showed that the wages offered to Chinese workers in major cities have declined the most in history. Oil bounced up from the $75.8 level.
Bonds. The yield on 10-year US government bonds failed to break through the downward trend line, falling to 3.91%. However, despite this, corporate bonds also declined.
The KASE index. For the third consecutive session, the index is slowly moving up from the local consolidation formed between December 14 and 28. Important resistance levels and historical highs are in the area of 4240 points.
Index shares. The BCC is becoming the leader of growth in the previous and current sessions. Today, the quotes are growing by 2.5% and give a hint of a new wave of growth. If the trading dynamics head towards recent highs, then it should be borne in mind that at the moment there is about 16% growth margin before they are reached. A remarkable trade is taking place in Kazakhtelecom shares – today, since the beginning of trading, quotations have reached the level of 36,000 tenge, but have rolled back to 34,600 tenge. Yesterday, relatively high trading volumes for shares were held and amounted to KZT 668 million, which indicates unusual investor activity in recent sessions. On the LSE, the People's Bank is declining for the second session in a row, thereby not breaking through important resistance levels. Kaspi grew by 1.2%, but remains in consolidation for now. Kazatomprom closed neutrally, while uranium reached $92 per pound.
Currency. The dollar was able to close yesterday's session with growth. Today, a slight strengthening of the tenge is noticeable, to 455.8. Inflation data yesterday showed its decrease to 9.8% yoy for December. We believe that the indicator may drop further to 7.5% in 2024.
Key market news
(=) Inflation: Annual inflation in December amounted to 9.8%
(=) KZAP: Kazatomprom will supply China with new elements for nuclear power plants