Our comments and expectations
The background. S&P 500 rose by 0.5% yesterday. Notably, stock movements within the index were active and mixed. This dynamic is typical for earnings season when stocks react to internal triggers, ignoring broader market trends. Tesla, Meta Platforms, and International Business Machines presented optimistic forecasts. At the same time, disappointing outlooks for cloud services led to a sell-off in Microsoft shares, which dropped by 6.2%. Donald Trump announced the introduction of 25% tariffs on Mexico and Canada starting tomorrow, February 1, which led to a decline in both countries' currencies. The Mexican peso fell by 1.1%, and the Canadian dollar weakened by 1.2%. Economic data showed that activity in the economy grew steadily at the end of 2024, despite the strike at Boeing Co. and a significant reduction in inventory investments. Consumer spending, which makes up the bulk of economic activity, increased by 4.2%—for the first time since late 2021, spending growth exceeded 3% in two consecutive quarters. Initial jobless claims fell to 207,000 last week from 223,000 the week before, below the consensus forecast.
Optimistic sentiment remains in Europe: leading indices Stoxx 600, DAX, and FTSE 100 continue their rally and are at historical highs. In Asia, moderate trading is observed this morning. Oil is trading slightly above $76 per barrel. Trump also stated that he will make a decision on including crude oil in the tariffs. Gold has once again reached its historical highs.
Bonds. The yield on 10-year U.S. Treasuries declined and is now quite close to its 50-day moving average, from which it rebounded in early December.
KASE index. The KASE index declined for the fifth consecutive session. Given the relatively stable situation in external markets, where oil prices are stabilizing, U.S. indices are recovering, and Europe is experiencing active growth, the KASE correction is starting to appear prolonged. Perhaps local investors are reacting to internal factors, such as the risks of VAT increases impacting inflation.
Index stocks. Most stocks in the index closed in negative territory yesterday, except for Kaspi, which showed modest growth of 0.3%. The correction continues to put strong pressure on KazMunayGas shares, which have been declining for 13 consecutive sessions. A correctional wave is also observed in Halyk Bank, similar to the dynamics of the KASE index. However, after the market opened today, its share price increased by nearly 0.9%. Among foreign stocks, Kaspi shares showed the highest growth, slowly approaching the 50-day moving average. If this average and the downward trendline are broken, the stock price could reach $107 and later has the potential to rise to $116.
Currency. The dollar is trading at 517.7 tenge this morning. The slight rebound has not yet developed further and remains constrained by local resistance levels.