Our Comments and Expectations
External background. The S&P 500 started the session in positive territory but later declined and closed down 0.1%. On the index map, the financial sector showed losses, semiconductor producers gained, and software developers’ shares fell. Market talk about a possible correction after the latest rally has intensified, especially given that August and September are historically considered the two weakest months for the S&P 500. According to Bloomberg, over the past three decades, the index has lost an average of 0.7% per month during this period, compared to an average gain of 1.1% in other months — explained by the fact that asset managers tend to rebalance their portfolios at this time of year. Reports emerged that Federal Reserve Board member Christopher Waller has become the leading candidate for Fed Chair among President Trump’s advisers, who are seeking to replace Jerome Powell. In Europe, the continental Stoxx 600 and DAX indices rose by 0.9–1.1%. This morning, Japanese indices are showing strong growth — the Nikkei 225 jumped 1.85%. Japan’s trade negotiator said that the U.S. had agreed to end the so-called accumulation of universal tariffs and reduce automobile duties. Gold rose 1.2% after reports that the U.S. may impose tariffs on bullion. Trump said he was “very close to an agreement” with China. In geopolitical news, Netanyahu received cabinet approval for a military takeover of Gaza City. Oil prices have been falling for the seventh consecutive session (including today), marking the worst streak since 2021. Traders believe that U.S. efforts to end the war in Ukraine will not affect overall supply volumes.
Bonds. The yield on 10-year U.S. Treasuries is slowly recovering after a recent drop. Emerging market bonds are performing slightly better than U.S. ones.
KASE Index. The KASE Index had a restrained session with moderate corrections in about half of the listed stocks. However, today’s opening showed a confident rebound in quotations.
Index stocks. Today’s growth leader is Kaspi.kz, mirroring the movement of its ADS on the Nasdaq. There, the shares have fully recovered from the recent drop and reached their highest level since May 9. We believe the previous decline was triggered by pre-earnings selling, while the current growth is driven by post-earnings buying. In other words, investor concerns over weak Q2 results were not justified, despite the fact that the company’s management does not plan to pay dividends this year. We also find the rise in BCC shares interesting, as it could develop into a new upward trend. Halyk Bank shares are recovering as well, although overall they remain in a local consolidation phase.
Currency. Today, the USDKZT pair is trading at 539.4 on Forex, in line with KASE trading levels. Quotes remain near the lower boundary of the dollar-against-tenge upward channel we described yesterday. The ruble strengthened against the dollar to 79.6.