Our Comments and Expectations
External Background. The S&P 500 showed a slight increase of 0.27% yesterday. The Dow Jones Industrial Average had a result twice as high, gaining 0.65%, while the small-cap Russell 2000 index surged by 1.63%. According to a Bloomberg survey, Trump's victory would be more beneficial for stocks and cryptocurrencies, while Harris's victory would contribute to a decrease in housing expenses. About 38% of respondents believe stocks will accelerate over the year with a Republican president, compared to 13% with a Democrat. According to a survey by 22V Research, large-cap stocks will lead regardless of the election outcome, except in the scenario of a complete Republican victory (the so-called "Republican sweep," when the party gains control of the presidency and a majority in Congress). In this case, small-cap stocks would have the advantage. In corporate news, Ford's shares dropped 6% in after-hours trading following a reduction in profit forecasts. It is worth noting that this week several companies accounting for nearly 42% of the S&P 500's market capitalization will report earnings, including major tech companies like Apple, Microsoft, and Meta Platforms. In Europe, indices showed modest growth, continuing a local sideways trend. A similar situation is observed in Asia this morning, reflecting the caution of major stock markets ahead of the U.S. presidential elections, the employment report, and a Federal Reserve meeting, all occurring within one calendar week. Oil prices fell after Israel conducted measured military strikes on targets in Iran without affecting oil infrastructure.
Bonds. The yield on 10-year U.S. Treasury bonds has resumed an upward trend after a brief pause. Corporate bonds showed a slight increase. According to the aforementioned 22V Research survey, investors expect an increase in the yield of 10-year bonds under Trump's presidency, with more significant growth anticipated in the Republican sweep scenario. The forecasts under Harris's presidency are less definitive.
KASE Index. The KASE has declined for the third consecutive session after testing the resistance level of 5240 points. Trading volumes are also decreasing but remain relatively high.
Index Stocks. Among the stocks, just over half of the issuers (60% to 40%) were in the red. Air Astana led the declines, following the dynamics of its GDRs. On the other hand, shares on the LSE showed growth on increased volumes yesterday. Kaspi gained the most, remaining at comfortable technical levels but below the 50-day moving average. The situation worsened for Kazatomprom: its GDRs fell below $39.4, re-entering the range of the previous sideways channel. On the KASE, slow declines continue for KMG quotes, which have remained at this level since early September.
Currency. Despite high declared volumes of foreign currency sales, the dollar is gaining strength again by the end of the month. Currently, the American currency is strengthening across the board amid rising Treasury yields.