Our Comments and Expectations
External backdrop. Yesterday, the S&P 500 closed up 0.4%. Growth was not hindered by Trump’s attempt to remove Federal Reserve Board Governor Lisa Cook, which raised concerns about the regulator’s independence and inflation risks. Clearly, Trump is seeking to secure a supportive majority on the Board, which would happen if she were removed. However, unlike with the Board, the president does not currently have the authority to appoint members of the Federal Open Market Committee (FOMC), which directly sets interest rates. Some market participants believe Trump’s attacks on the Fed could lead to higher bond yields—essentially the opposite of his intended goals. Recently, S&P Global Ratings warned that the U.S. credit rating could “come under pressure if political events undermine the strength of American institutions.” Today, investors’ focus will be on Nvidia’s earnings report after the market close: the company accounts for about 8% of the S&P 500’s weight and has a significant impact on the market. From the economic side, U.S. business equipment orders in July rose more than expected, signaling that companies continue to implement investment plans. On the other hand, consumer confidence slipped slightly: the Conference Board index fell by 1.3 points in August, to 97.4. In Europe, conditions were weaker: major indices lost 0.5–0.8% amid rising concerns about inflation and widening budget deficits in France and the UK. In Asia this morning, Hang Seng (-1.4%) and CSI 300 (-1.5%) were down. Oil declined to $66.5.
Bonds. The yield on 10-year U.S. Treasuries is trading at 4.26% — the lowest since August 14.
KASE Index. Yesterday, the KASE added another 0.3%. Since the index is up 0.4% from today’s open, we anticipate a third consecutive positive close. This confirms our local outlook of movement toward resistance levels, which also represent historical highs.
Index stocks. It is worth noting that the local market is currently moving along its own technical trajectory, ignoring negative signals from European and Asian markets. Shares of BCC, which we highlighted yesterday, continue to rise. Since the market opened today, prices have nearly reached previous highs, creating a risk of slowdown at resistance levels. Overall, Kazatomprom also looks strong, attempting to consolidate at its historical highs today. On the LSE, its stock reached $45.4 — the highest since May 2024.
Currency. Yesterday, the dollar reversed during the session and is trading again at 537 tenge today. This is a clear signal to cancel our previous forecast of a decline in USD to 532 tenge. There is a possibility that the dollar will retest the resistance level of 537 and then bounce downward — we are monitoring.