Our Comments and Expectations
External background. The S&P 500 rose for the fourth consecutive session. The major positive driver remains expectations of rate cuts. According to market derivatives, traders are now pricing in an 80% probability of a rate cut during the December FOMC meeting. The recently published Beige Book indicates that US employment has slightly weakened and prices have grown moderately based on a survey of regional business contacts. The number of initial jobless claims unexpectedly dropped to 216,000 last week — the lowest since mid-April — remaining contained amid economic uncertainty. On the geopolitical front, Donald Trump instructed his top negotiators to meet with Vladimir Putin in Moscow to discuss a peace proposal on Ukraine. The meeting transcript showed Trump describing the talks as “standard negotiations.” In Europe, indices rose 0.9–1.1%, actively rebounding after a correction. In Asia, moderate gains were seen in Hong Kong and mainland China, as the real estate sector concerns resurfaced after China Vanke proposed delaying bond repayments for the first time. Oil is trading at $62.2 this morning. According to EIA data, US crude inventories unexpectedly increased by 2.77 million barrels last week. S&P 500 futures remain neutral, and the US market will be closed today.
Bonds. The bond market saw minimal changes yesterday. The 10-year US Treasury yield stands at 3.99%.
KASE Index. The KASE Index had a strong session, showing gains for the third straight day. The local market continues to take cues from Western indices, although still lagging in performance.
Index constituents. Leaders of the growth were stocks linked to external trading sentiment. Kaspi gained 4.2%, supported by strong performance of the US market and its ADS in the previous session. Nasdaq trading closed neutral yesterday, keeping the overall picture steady. Kazatomprom also advanced: +3.7% on the LSE and +2% on the local exchange. The GDR triangle formation continues. Halyk Bank is gradually recovering after the SPO but has not yet broken the local downward trendline. We assessed KMG’s latest report as neutral: revenue growth continued despite lower oil prices, although operating margin declined. The target price was raised by 100 KZT to 23,200 KZT. Kazakhtelecom’s report was moderately positive: revenue continues strong double-digit growth with a slight acceleration, and margins significantly improved versus last year. Recommendation: Hold.
FX. USDKZT shows little movement this morning, returning to 517.6. The ruble’s strengthening against the USD paused at the level of 78.5.