Our Comments and Expectations
External backdrop. The S&P 500 fell 0.9% during yesterday’s session. Investors appear to be moving away from risk ahead of Nvidia’s earnings report and after news that Peter Thiel’s fund sold its stake in the company last quarter — becoming the second major fund to exit. Additionally, Jeffrey Gundlach warned that the $1.7 trillion private credit market is involved in “junk lending,” which could trigger a new collapse. Moody’s added that private credit adds risk by masking leverage capabilities. Investors will also be watching this week’s labor market data. In neighboring Canada, inflation slowed less than expected last month. The Fed’s Philip Jefferson said labor market risks are now tilted toward deterioration, while Christopher Waller called for another rate cut, citing weak employment conditions. European indices also declined: Stoxx 600 has been correcting for the third session in a row, and DAX fell to its lowest since November 7. According to the European Commission’s forecast, the eurozone economy will maintain moderate growth: output will rise 1.3% in 2025 and 1.2% in 2026. Asia opened with notable weakness: Hang Seng is down 1.6%, Nikkei 225 fell 2.7%, and Korea’s Kospi plunged 3%. India reported it is close to finalizing the first phase of a trade agreement with the U.S. Japan urged Chinese citizens to take precautions amid rising tensions between Tokyo and Beijing. Oil trades at $63.8 this morning. S&P 500 futures are down an additional 0.4%, approaching their lowest levels since October 17.
Bonds. Yields on 10-year Treasuries declined slightly following comments from Fed officials. Corporate bonds traded moderately negative.
KASE Index. The KASE index continued its decline yesterday, losing 0.56% and breaking below a support level. Quotes are now at their lowest since August 29. We believe the market is pressured by external sentiment — transmitted through Kaspi and Kazatomprom stocks — as well as the high base rate and the strengthening of the tenge.
Index stocks. The biggest decline yesterday came from Kazatomprom. Technically, the setup has not changed, but on KASE the stock dynamics are starting to form a narrowing triangle pattern. On the LSE, this shape is not yet visible. This may indicate decreasing volatility and a potential upward breakout, as we do not see major downside triggers aside from a possible pullback in AI stocks, with which uranium energy is currently being associated. Kaspi closed neutral on the local market but fell another 1.6% on Nasdaq. Still, it has not broken below key support levels. The second-biggest decline was in Air Astana, whose shares remain stuck in a sideways trend after the recent quarterly report.
Currency. USDKZT fell to 521.7 on Forex yesterday. The RSI relative strength indicator is again moving into the oversold zone for the dollar. This morning, the currency pair is trading neutrally.