Our Comments and Expectations
External Background. The S&P 500 rose by 0.5% over two sessions, reaching its highest level since February 24. The focus was on economic data. Nonfarm payrolls increased by 139,000 last month after a cumulative decline of 95,000 over the previous two months. The unemployment rate remained at 4.2%, while wage growth accelerated. Although the report exceeded expectations, it signaled a slowdown in hiring in May, and data for previous months was revised downward, suggesting employers are cautious in their outlook. Trump announced that U.S. and Chinese negotiators would resume trade talks today in London. Reports suggest a breakthrough on the issue of critical minerals has been achieved. Looking ahead, investors are awaiting inflation data on Wednesday — the core indicator is expected to rise by 0.3% in May (a four-month high), accelerating to 2.9% year-over-year. In Europe, indices rose 0.1–0.5% over two sessions. This morning, futures on European indices are showing a slight decline. In Asia, the Hang Seng is up 1.1%, and the Nikkei 225 is up 0.9%. Oil showed strong growth on Friday but is struggling to break through the resistance level of $66.6 this morning. S&P 500 futures are down 0.13%.
Bonds. The yield on U.S. 10-year government bonds jumped sharply, and their prices fell. The labor market report prompted traders to reduce their bets on a Fed rate cut this year. Interest rate swaps now reflect about a 70% chance of a quarter-point rate cut by September, compared to around 90% last Thursday.
KASE Index. The KASE index is regaining ground — quotes rose for the fourth session in a row, recovering the losses from May 28–30. However, the index remains within a sideways trend overall.
Index Stocks. The top gainer on Thursday was Kazakhtelecom, which added 7.1%. We had previously expressed skepticism about post-dividend growth in these shares but also noted technical signals for upward movement — which have now materialized. The nearest resistance levels are 42,000 and 44,000 tenge. Kazatomprom shares also showed decent growth. We reviewed the company’s Q1 report and consider it neutral: revenue declined due to a shifted delivery schedule and lower selling prices, and operating margins fell accordingly. At the same time, the company posted strong growth in free cash flow. On Friday, Kaspi ADSs on Nasdaq rose by 1.34%, and the day before — by 2%. The shares are now entering a critical test of their 50-day moving average, which will determine the next short-term trend.
Currency. The U.S. dollar weakened, failing to break above the 50-day moving average on the USD/KZT chart and remaining in a local consolidation range. Today, the dollar is trading at 508.75 tenge.