Our comments and expectations
External Background.
Yesterday, the S&P 500 followed the lead of Asian markets, where a strong rebound was observed earlier in the day. As a result, the U.S. benchmark index and the tech-heavy Nasdaq rose by 1%. The industrial Dow Jones lagged slightly, closing with a gain of +0.76%. The VIX fell to 27.7 points, marking its sharpest drop since 2010. Among the leaders were Nvidia (+3.78%), META (+3.86%), and JPMorgan (+2.79%). Market commentators noted that investors have regained some calm, with financial analysts frequently mentioning that such pullbacks are normal and healthy for markets. George Smith of LPL Financial highlighted that in 94% of cases since 1928, markets experienced at least one 5% pullback per year, and in 64% of cases, a 10% pullback. Investor anxiety also eased, as evidenced by a sell-off in U.S. Treasury bonds. European indices lagged behind their counterparts in Asia and the U.S. The Stoxx 600 rose by only 0.3%, in line with the British FTSE 100. The DAX added 0.1%. It was reported that manufacturing orders in Germany grew for the first time this year. The 3.9% jump in June exceeded all estimates. In Asia, markets are again seeing gains this morning, although more modest than yesterday. The Nikkei 225 is up by 1.5%, and the Topix by 4.1%. Oil is testing support at the $75.9 level this morning. S&P 500 futures are rising by 0.75%.
Bonds.
The yield on 10-year U.S. Treasuries saw a solid rebound yesterday, recovering to 3.88%.
KASE Index.
The KASE index rose by 1.6%, recovering to levels last seen at the end of June. It is noteworthy that this level represents significant resistance, which has been tested twice and was only broken on the third attempt. Nevertheless, we consider it a positive outcome that the index did not break important horizontal support levels. If the index continues to grow today, the chances of further recovery up to a retest of historical highs will increase.
Index Stocks.
The largest growth yesterday was recorded by Kaspi.kz. The stock rose by 5.2% on KASE and by 2.1% in the U.S. There remains a noticeable price gap of 8.9% between the two. On the other hand, the ADS still has room to recover to the 50-day moving average, which gives about 7.5-7.8% local upside potential. Among GDRs, Kazatomprom showed the largest gain, with quotes rising by 3.7%, which is significant as the rebound occurred from a long-term upward trendline.
Currency.
The tenge is strengthening to 474.6 per dollar today. A noteworthy point is that the exchange rate of the national currency had previously weakened against the dollar despite the greenback's depreciation in global markets. Now, with rising U.S. Treasury yields and the dollar strengthening, the tenge is also appreciating. This hints at the panic-driven nature of the recent decline in the USD/KZT chart.