Our comments and expectations
External background. The S&P 500 gained 0.3% yesterday, which was the 41st record close of the leading US index this year. At the same time, the opening of trading was reduced due to an unexpected drop in consumer confidence in September - the largest in three years — which raised concerns about a slowdown in the labor market. Thus, the Conference Board consumer sentiment index fell to 98.7 this month from an upwardly revised value of 105.6 in August. The market forecast was at 103.9. However, then the S&P 500 began to rise to the level of 5,730 points, near which it eventually closed. Among the individual stocks, Nvidia can be singled out, which grew by 4% and supported the recovery of the index. Michelle Bowman said the Fed should cut rates at a "moderate" pace as inflation risks persist, and also disagreed with the Fed when the regulator cut the rate by 50 basis points. In Europe, index quotes showed a slightly better result. The German IFO business climate index fell again in September to 86.3 points, which increased fears that the economy is in recession. Meanwhile, money markets have estimated a roughly 50% chance that the ECB will cut interest rates by a quarter point in October. In Asia, the Hang Seng is growing again in the morning, after yesterday's 4 percent rise. However, after reaching the highs of May, the quotes retreated downwards and now show +1.2%. Due to the Chinese factor, copper is also showing growth.
Bonds. The 10-year yield fell to 3.73% yesterday after the initial increase. Corporate bonds remained motionless.
The KASE. KASE index experienced a very volatile session yesterday. The index quotes rose to 5,229.73 points (+1.31%) and fell to 5,053.64 points (-2.1%). At the same time, non-obvious stocks, such as KMG and BCC, also went into the price gap.
Index shares. KMG shares unexpectedly declined yesterday, and reached -18% during the session. It is difficult to say what could have caused such a fall – a forced disposal or a panic sale, but most of the fall was bought off. The situation was similar for BCC shares, but in practice such volatility is not uncommon for CCBN securities. Kaspi and Kazatomprom securities increased by 3.6% and 3.7%. The accumulated price difference between ADS and Kaspi common shares on KASE is striking, which before the opening of trading today was about 17.7% in favor of the local market. Historically (since the LSE), the difference between exchanges on calm days has been in the range of 5-10%, however, securities on the local market are characterized by a more restrained reaction to the fall of GDR and ADS, which causes large price discrepancies during periods of volatility. As for Kazatomprom, the somewhat disappointing fact remains that the GDR cannot break through the resistance around $39.4.
Currency. Tenge is actively testing its 50-day moving average on the USDKZT chart today. In addition, it is located at the lower boundary of the upward (for the dollar) trend. We believe that there are still few prerequisites for a sharp rebound of the dollar from support levels.