Our Comments and Expectations
External Background. After opening with a decline, the S&P 500, Dow Jones, Nasdaq, and Russell 2000 indexes recovered during the first half of the session and closed in neutral territory. On the S&P 500 heatmap, technology sector stocks led the gains, offsetting small declines in other sectors. According to ADP data, U.S. private sector employment increased by 143,000 in September, while annual wages rose by 4.7% compared to the same period last year. This surprised market participants, as the figures were higher than expected and contradicted other indicators suggesting a cooling labor market. Today, initial jobless claims data will be released, followed by the key labor market report of the month—non-farm payrolls. Richmond Federal Reserve President Thomas Barkin stated that it's too early for the central bank to declare victory over rising prices and added that significant uncertainty remains regarding both inflation and employment. Meanwhile, tensions in the Middle East persist, with President Joe Biden working to restrain Israel from attacking Iran's nuclear facilities in response to rocket strikes. In Europe, markets also closed neutrally, but today they may face pressure due to the stalled growth in the Chinese market and geopolitical concerns. The Hang Seng index has been volatile this morning, falling by as much as 4.4% at the start of trading but now down by only 0.8%. Mainland Chinese markets remain closed. Japan's Nikkei 225 is rising, supported by a weakening yen.
Bonds. After a decline yesterday, U.S. 10-year Treasury yields have returned to locally stable levels around 3.8%.
KASE Index. The KASE index fell by 0.6% yesterday, primarily due to Kaspi stock. However, Kaspi ADS on the Nasdaq showed opposite movement, surging by 4.6% and signaling the potential start of a recovery.
Index Stocks. Finally, Kaspi shares and ADS have aligned in price. At the close of the U.S. session, ADS were almost 2% higher, a situation not seen for quite some time. Moreover, Nasdaq shares are currently showing an interesting hint of a possible local growth wave, which could bring prices back to $123, offering a potential profit of 13.4%. Since the stock’s drop on September 18-19, this is the strongest technical signal the prices have shown. The biggest decline among GDRs was in Narodny Bank, which lost 3.1%. While the stock remains in a sideways trend around its 50-day moving average, this could affect local shares today. Air Astana continues to decline from local resistance levels.
Currency. The dollar rose yesterday, closing at 483.4 tenge. We believe the trigger for the strengthening was the rise of the dollar index (DXY), which reached its highest levels since September 3 over the last four sessions (including the current one). However, today's growth may halt as it tests resistance levels.