Our Commentary and Expectations
External Background. The S&P 500 rose by 0.3% yesterday. The first half of the session was marked by increased volatility after news outlets reported a leak that Trump had expressed his intention to fire Jerome Powell during a meeting with Republican lawmakers. However, the president later denied such plans and refrained from making new attacks against the Fed Chair. This morning’s spotlight is on Trump’s statement that he will send letters to more than 150 countries, notifying them of tariffs “probably 10 or 15%.” Bloomberg, citing informed sources, reports that Trump is softening his tone toward China in hopes of securing a meeting with Xi Jinping and reaching a trade agreement. U.S. industrial production rose last month thanks to gains in utilities and modest growth in manufacturing. Fed officials Williams and Bostic both advocated maintaining current interest rates, pointing out that the impact of tariffs would become evident in the coming months (Williams) or not until 2026 (Bostic). Asian markets are showing moderate gains this morning, and S&P 500 futures are neutral. Oil prices are down for the fourth consecutive session, reaching $67.8. It is reported that most oil companies in Iraqi Kurdistan have halted production following drone attacks.
Bonds. The yield on 10-year U.S. Treasuries is slightly declining after Friday’s increase. As of this morning, it stands at 4.48%.
KASE Index. The KASE Index closed flat yesterday, continuing to move within a local consolidation range. Trading volumes dropped to their lowest since June 27, when the index had just begun forming an upward wave.
Index Stocks. The session was generally moderate for most index stocks. Kaspi led the gains, which comes as no surprise, as its shares mirrored the ADS dynamics from the previous session. However, Nasdaq-listed shares rose another 1.1%, breaking both the descending trendline and the 50-day moving average. This significantly improves the technical outlook and signals a potential for further growth. As a reminder, our target price for Kaspi ADS after Q1 results is $104, offering over 22% upside from yesterday’s close. The biggest decline came from Kazatomprom, which is typical for a stock that recently went ex-dividend. We expect volatility to decrease in upcoming sessions.
Currency. This morning, USDKZT is trading at 533 tenge, nearly confirming our May forecast of the dollar rising to 530 tenge by mid-summer. However, this level was reached rather quickly, and we’re now seeing a breakout with the tenge falling to historical lows (as far as 533.3), which negatively affects the national currency’s technical outlook. Key negative factors include the rising U.S. Dollar Index (DXY), which has yet to break an important resistance level — the 50-day moving average — and the government’s revision of its tenge exchange rate forecast from 475 to 540 KZT for 2026.