Our Comments and Expectations
External Background. The S&P 500 attempted to recover after the fall two days ago, but the attempt was unsuccessful, and the index closed 0.1% lower. The U.S. economy grew by 3.1% year-on-year in the third quarter, which was the fastest pace this year. This figure was revised: it was previously reported as 2.8%, which was already a high result. Additionally, one of the Federal Reserve’s preferred inflation indicators—the core personal consumption expenditure (PCE) price index—was revised to 2.2%. The number of initial jobless claims in the U.S. fell to 220,000, against an expected 230,000. Such pro-inflationary statistics failed to instill optimism in the market, which was trying to recover from the Fed's comments on inflation risks and fewer-than-expected rate cuts in 2024. The swap market now expects a less than two-quarter point rate cut over the entire year of 2025, which is even lower than what was expected from the Fed's "dot plot" on Wednesday. Next, investors will closely watch the personal consumption expenditures (PCE) data for November, which will be released on Friday. Meanwhile, the House of Representatives, led by Republicans, rejected a temporary funding plan, reportedly supported by Donald Trump. A government shutdown could occur as early as this Saturday. Indices in Europe lost 1.1–1.5%, reflecting the previous S&P 500 decline. Asian indices were trading neutrally in the morning, except for the Korean Kospi, which has been frequently in the deep negative zone recently. Oil is trading at $72.4 today, marking its fourth consecutive session of decline. Other commodities also showed losses.
Bonds. The yield on U.S. 10-year government bonds continued to rise, putting pressure on emerging market bonds.
KASE Index. The KASE Index lost 0.7% yesterday. The prices continued their downward wave; however, according to the chart, they are approaching the support of the upward trend line.
Index Stocks. The largest drop was recorded in Kaspi stocks. These stocks are highly sensitive to U.S. market sentiment and are more prone to short-seller attacks. However, yesterday ADS shares ended their seven-session losing streak with a modest increase of 0.7%. The National Bank GDRs lost 1.4% and are testing the support level at $18. On the local market, the support level is less pronounced on the chart, but we believe the prices might be supported by investors around the 240 tenge mark. Air Astana stocks are holding a sideways trend but could start a new downward wave. Local resistance levels are at 834 and 844 tenge. The only stock on the local market that continues to maintain an upward trend is KEGOC. Previously, KMG was such a stock, but its shares have started to enter sideways consolidation.
Currency. The dollar continues to hold below the 525 tenge mark. This level appears to be significant enough that it seems to be intentionally maintained at this level.