Our Comments and Expectations
External Background: The S&P 500 gained 0.6% yesterday and reached historic highs, which some perceive as the beginning of the Christmas rally. Most stocks showed growth, with large companies like Microsoft, Amazon, and Eli Lilly & Co standing out. Semiconductor stocks and companies related to Mexico and Canada, such as automakers GM and Ford, were in the red, although overall markets ignored the additional tariffs imposed by Trump. The growth trigger was a ceasefire agreement between Israel and Hezbollah, which reduced geopolitical tension. Meanwhile, Deutsche Bank believes the US market still has room for further growth. The bank has set a target of 7000 points for the S&P 500 by the end of next year, which is the most optimistic forecast on Wall Street at the moment. According to Bloomberg, since 1950, the S&P 500 index has risen in 80% of cases between the Tuesday before Thanksgiving (November 28) and the second trading day of the New Year, with an average gain of 2.6%. Among macroeconomic news, US consumer confidence in November rose to its highest level in over a year, reflecting optimism regarding the economy and the labor market. Today, the market is awaiting data on the PCE deflator and initial jobless claims, which will be released a day earlier due to the holiday Thursday. In Europe, unlike the US, indices showed moderate declines. In Asia, there is mixed movement this morning. In China, the government approved a 500 billion yuan ($69 billion) bond issuance quota, which will allow the issuance of government bonds to finance investment in economic growth stimulation projects. Among commodities, copper and gold have shown good gains.
Bonds: The yield on US 10-year Treasury bonds rose to 4.31%.
KASE Index: The local market showed some momentum, which may be a sign of a New Year rally. KASE rose by a solid 0.8%, updating its historical highs and moving out of local consolidation. Trading volumes also increased.
Index Stocks: The rally continues in BCC stocks. We haven't seen any significant news, but this has become a characteristic feature of these stocks — showing growth without clear reasons. The second-largest gain was seen in Kazakhtelecom. Expectations are growing among investors for additional data regarding the deal, although no official information has been released yet. A surprise came with the growth of KMG shares, which had only shown signs of a local rebound earlier. Most likely, the trigger was the news of plans to increase dividends by 17% for 2024. The rally continues in the National Bank's stocks, which are approaching the 250 tenge mark. Meanwhile, on Nasdaq, Kaspi has been a leader in growth, starting to recover its positions.
Currency: The dollar continues to stay below the 500 tenge mark. The comments from the National Bank about not being "tied" to round numbers may be interpreted by the market as a signal to expect further growth in the dollar exchange rate.