Our Comments and Expectations
External Background. The S&P 500 closed flat yesterday. Investor attention was focused on the China–U.S. trade talks in London, and judging by the index chart, the lack of any major breakthroughs led investors to return the S&P 500 to its opening levels by the end of the trading day. Nevertheless, U.S. officials remained optimistic: Howard Lutnick called the negotiations between Washington and Beijing “productive,” while Trump said that “everything is fine with China.” Today marks the second day of talks, and tomorrow a key inflation indicator is expected, which could increase stock market volatility. Among market updates, Citi strategists raised their year-end target for the S&P 500 to 6,300 points (a 4.9% upside), while Morgan Stanley reaffirmed its 12-month target of 6,500 points. Meanwhile, unrest in California continued for the fourth consecutive day: the state governor pledged to file a lawsuit to block the deployment of National Guard troops ordered by the Trump administration. At the same time, Trump appears to have reconciled with Musk after a brief disagreement, which helped Tesla stock rise by 4.55%. Asian markets are seeing modest index fluctuations this morning. Chinese exports to the U.S. fell by 34% last month amid the trade war, marking the steepest decline in five years. Futures on the European Stoxx 600 and DAX indices are showing slight growth after a mild drop yesterday. E-mini futures on the S&P 500 are trading flat. Oil has broken through local resistance at $66.6 and the 50-day moving average, and is now trading at around $67.2.
Bonds. The yield on 10-year U.S. Treasuries fell below 4.5% after two days of strong gains.
KASE Index. The KASE index rose for the fifth consecutive session, but as it approached the upper boundary of the sideways trend, the upward momentum began to slow, as quotes started to meet resistance.
Index Stocks. Yesterday's growth leader was once again Kazakhtelecom, whose shares rose by 4.2%, reaching levels last seen on November 19, 2024. However, this morning the stock is no longer rising, which may signal the end of the local rebound. Also noteworthy is the 4.1% increase in Kazatomprom GDRs, which reached highs not seen since May 30, 2024. Our forecast for a short-term rally in these stocks and GDRs has materialized. Going forward, we recommend caution in the short term, as the Relative Strength Index (RSI) is entering overbought territory on both daily and 4-hour charts. The entire sector rose, though no clear triggers were identified — likely driven by the upward revision of revenue forecasts for Westinghouse, a Cameco subsidiary that is building two reactors in the Czech Republic.
Currency. The dollar is weakening toward 508 tenge. If it falls by another 2 tenge, we may consider revising our forecasts, as the technical picture would then suggest further strengthening of the tenge.