Our Comments and Expectations
External Environment. The S&P 500 rose by 0.8%, reaching new all-time highs. The trigger for the rise was a trade agreement that boosted Japan’s Nikkei 225 by 3.5% this morning. At the same time, there were supportive market news about a potential agreement with the EU: European diplomats reported that the EU and the US are moving toward a deal involving 15% tariffs on most goods—similar to the US-Japan pact. However, the American side was less optimistic and pointed to the instability of the negotiations. Howard Lutnick said that Japan’s promise of large investments in the US “could become” a model for the EU. Google shares rose 1.8% in post-market trading after reporting revenue above expectations but warned that capital expenditures would exceed forecasts. Tesla’s results, as expected, were weak — its shares fell 4.4% after the main session ended. Meanwhile, in the US market, interest in so-called “meme stocks” reignited: previously, shares of Kohl’s, Krispy Kreme, and Beyond Meat rose sharply. In Europe, indexes also showed growth — Stoxx 600 gained 1.1%, bouncing off the 50-day moving average. Positive sentiment persists in Asian markets this morning: Nikkei 225 is up 1.7%, Hang Seng up 0.6%. It was also reported that Turkey’s Central Bank is preparing to cut rates for the first time after the political crisis in March. Oil is up for the first time in four sessions — US crude oil inventories decreased by 3.17 million barrels, according to EIA data.
Bonds. The yield on US 10-year Treasuries rose alongside the stock market rally. Corporate bonds were neutral.
KASE Index. The KASE index rally continues — the initiative was taken by shares of Народный банк (People’s Bank), but today KazMunayGas is breaking ahead. The benchmark quotes rose 0.8% yesterday and gained another 1.4% at the market open today.
Index Shares. Yesterday, the growth leader was Народный банк shares following news that the group sold 49% of its subsidiary bank in Uzbekistan to the Uzbek digital payment system Click. Click’s client base exceeds 20 million people, with a 38% share of the mobile payments market. The bank aims to cover an audience of over 32.1 million people. Shares rose another 2.7% at the market open today. Recall that yesterday we noted HSBK shares signaling an exit from local consolidation. Also, a strong rally in KMG shares continues at the start of the current session, approaching the 20,000 tenge mark. On Nasdaq, Kaspi ADS shares rose 1.9%, indicating a continued rebound after breaking resistance levels. An interesting news item yesterday came from Trump: he called for increased energy supply to data centers to prevent China from gaining an AI advantage. This is potentially a positive factor for Kazatomprom, as large companies may increase demand for nuclear energy.
Currency. Yesterday, the dollar was firmly contained at the 540 tenge level. Today, trading opens at 538 tenge. Likely, another local consolidation is forming under this level.