Our Comments and Expectations
External Environment: The S&P 500 opened yesterday with a sharp decline but showed recovery for most of the session before correcting again in the last hour of trading. One of the reasons for the growth after the opening was US Secretary of Commerce Howard Lutnick's comments that Trump is considering a compromise in the tariff deal with Canada and Mexico. He added that the US may announce a mechanism for removing tariffs on Mexican and Canadian goods as early as Wednesday. In his view, the tariffs are likely to be "somewhere in the middle." Meanwhile, Goldman Sachs reported that their risk appetite indicator had moved into negative territory for the first time since October due to concerns over economic slowdown. According to the bank, sentiments regarding S&P 500 companies' profits are now "extremely negative." In Europe, the decline was even deeper than in the US, although European indices had recently outperformed US indices in positive dynamics. The Stoxx 600 index dropped by 2.1%, while the German DAX fell by 3.5%. This morning, Asian markets are showing more positive dynamics: Hong Kong's Hang Seng index rose by 1.6%, seemingly in response to Lutnick's comments. The main focus is on the National People's Congress, where the Chinese government set a target economic growth rate of 5% by 2025. Traders expect Chinese authorities to strengthen stimulus measures to achieve this goal. Oil prices continue to decline and are approaching $70 per barrel for Brent.
Bonds: The yield on 10-year US Treasury bonds rose to 4.2% yesterday. However, the trend remains downward.
KASE Index: The KASE index closed neutrally yesterday. During the session, prices tried to break the 5640-point level and continue the recovery, but this attempt was unsuccessful due to the rather negative external environment, where investors are moving away from risks.
Index Stocks: The growth leader once again was BCC, which gained 2.6%. It seems that the stock is starting a new growth wave after a consolidation period, which corresponds to its usual dynamics in recent years. The biggest decline was seen in Air Astana stocks. Yesterday, we noted that the stock prices formed a resistance level below 800 tenge, from which a downward rebound occurred, leading to a second consecutive session of declines. Kazakhtelecom continues its slow growth, while KMG stocks rose by 0.8% despite falling oil prices. Among ADS and GDR, there was also negative dynamics, but the stocks closed at relatively stable levels compared to the intraday lows. For example, ADS finished trading at $102.8, though during the session, they fell below $100. Kazatomprom has slowed the pace of its decline and is now forming an upward divergence on the 4-hour chart.
Currency: The tenge is trading unchanged at 499.3 against the dollar this morning. There are no changes in the USDRUB rate. The Dollar Index (DXY) is decreasing to levels last seen on November 12th of last year.