Our Comments and Expectations
External Background. The S&P 500 added another 0.7% yesterday, reaching a new record high for the 49th time this year. Growth was driven by large-cap and technology sector companies. Banks showed negative dynamics, with JPMorgan and Wells Fargo losing 4.3% and 3.7%, respectively. The Fed expectedly cut rates by 25 basis points yesterday. Jerome Powell gave optimistic comments, saying the economy is strong, but refrained from indicating whether the Fed would avoid further rate cuts in December, though he did not rule them out. In his statement, he removed the reference to "further" increases in inflation, noting that inflation "has made progress toward the committee's 2% target but remains somewhat elevated." Powell also stated he would not step down if President Trump asked him to. In Europe, indices showed gains, led by Germany's DAX, which rose 1.7%, moving above the level seen before the recent decline. The Bank of England cut its key rate by 25 basis points to 4.75%, as expected, but did not signal a quicker easing, warning that the budget could increase inflation by up to half a percent. In Asia, this morning saw a failed growth attempt for the Hang Seng index, with a similar situation for the mainland CSI 300. Investors today are waiting for China's top legislative body to release a package focused on a refinancing plan for off-balance sheet debt of local governments. Oil is trading slightly above the $75 mark. U.S. inventories increased by 69 billion cubic feet last week, exceeding the average estimate, according to the Energy Information Administration (EIA).
Bonds. The yield on U.S. 10-year Treasuries decreased yesterday but remains in an upward trend, allowing corporate bonds in emerging markets to show growth.
KASE Index. KASE rose by 0.45% yesterday, moving closer to its historical highs. Based on closing trade results, the potential for growth to the maximum is about 0.4%. The absolute high of 5,356.7 points was recorded on August 27, with a further 0.9% needed to reach it. Notably, the final result in yesterday's trading was significantly lower than intraday highs, forming a substantial shadow on the daily candle of the index.
Index Stocks. The largest growth was shown by Air Astana, which presented a good report for the third quarter. Our assessment of the report's results is available via a link. In the local market, quotes have started breaking above the 50-day moving average; however, more important levels remain the horizontal mark of 845 tenge and the descending trendline. Kcell also continues to grow. Kaspi shares added 1.1%, but declined on Nasdaq and have not yet managed to overcome the downward trend. Halyk Bank’s GDRs showed a decent attempt at growth yesterday, with quotes rising to $19.3—a level close to highs since 2007.
Currency. The dollar fell slightly yesterday and is trading at 491.2 tenge today.