Our Comments and Expectations
Background. The S&P 500 rose by 0.83%, recovering recent losses and closing at record highs. Market participants are preparing for Friday’s labor market report, which is expected to confirm the weakest period of U.S. employment growth since the pandemic and once again underscore the need for Fed rate cuts. Economists forecast around 75,000 new jobs in August and an unemployment rate of 4.3% — the highest since 2021. This could mark the fourth consecutive month with job creation below 100,000.
Meanwhile, the weekly report on initial jobless claims showed the highest level since June: claims rose by 8,000 to 237,000 for the week ending August 30. Bloomberg consensus was 230,000. According to a 22V Research survey, 36% of respondents expect a “negative” market reaction to Friday’s data, 35% expect a “mixed / modest” one, and 29% anticipate a “positive” reaction.
In Europe, indices also rose by 0.4–0.7% but remain well below record highs. In Asia, markets are up today: Chinese and Hong Kong indices are rebounding after yesterday’s decline. Japanese equities strengthened after President Donald Trump signed an order implementing the trade agreement with Japan. Oil corrected after reaching $69, with Brent now trading at $66.7 ahead of the OPEC+ meeting, where the group may approve another increase in supply.
Bonds. The yield on 10-year U.S. Treasuries fell below the August 5 low, reaching the lowest levels since May 1. This reflects expectations of rate cuts.
KASE Index. The KASE declined for the first time after seven consecutive sessions of growth. This was expected, given the absence of support from Bank CenterCredit shares, which showed the highest volatility yesterday.
Index Constituents. A major sell-off occurred in CCBN shares yesterday — apparently an investor decided to lock in significant profits from the recent rally. The price dropped to 4,675 tenge (–19%), suggesting a large market volume trade. Typically, after such sell-offs, a wide spread forms in the order book, and just a few trades can return quotes to previous levels. However, trading may remain weak for several sessions due to the fulfillment of a large number of buy orders. In addition, new investors may be discouraged by the risk of repeated sell-offs, which depend on a limited number of holders.
Meanwhile, Halyk Bank shares on the LSE rose by 3.9%, bouncing off the $25.6 support level we mentioned yesterday. However, this rebound has not yet been enough to break out of the sideways trend.
Currency. The dollar failed to break above the upper boundary of the channel and retreated, as we warned yesterday. USDKZT quotes fell to 537.2, with local support noted at 536.8.