Our comments and expectations
External backdrop. The S&P 500 was poised to refresh its all-time highs yesterday, but as trading began the gains started to fade, and by the end of the session the index slipped 0.2%, snapping a streak of four consecutive advancing sessions. During the day, prices reached 7,793 points, which at the peak implied a gain of about 0.7%. Positive news from the Middle East also failed to help the market: Iran said it had reached an agreement with Oman on the proposed shipping route through the Strait of Hormuz, and Trump said talks with Iran were “going very well.” Nevertheless, there was still no official announcement of the 60-day agreement between Iran and the U.S. on shipping through the Strait of Hormuz that Axios reported. On the other hand, Yemen’s Houthis renewed threats toward shipping in the Red Sea. On the economic front, we note that the ISM services PMI rose by 0.1 points to 54.1, pointing to steady sector growth, although rising costs continued to pressure companies. According to ADP data, private-sector jobs increased by 44k in July, below expectations. This morning sentiment in Asia is negative: the Hang Seng is down 1.9%, while the volatile, tech-heavy Kospi is falling 4.6%. The spotlight is on SoftBank’s results and the end of the lock-up period for a large volume of SpaceX shares worth $101 bn. Oil is trading below the round $80 per barrel level for Brent this morning. S&P 500 futures are up 0.1%.
KASE Index. KASE rose another 0.2% in a relatively calm session. As a result, the index’s rally extended to seven consecutive sessions.
Index stocks. The biggest gain came from Kazatomprom shares — up 1.4%. From a technical standpoint, we see the rally continuing after a breakout above the downward trend line that had been in place from early June through late July. On the LSE, prices also rose and finally moved above the 200-day moving average, providing some signals in favor of continued upside momentum. Next, the stock needs to clear the 50- and 100-day moving averages. Kazakhtelecom shares rose 1.1% and continue to move higher: since July 3, the stock has gained more than 10% and is heading toward the March highs around 44,900–45,000 tenge. Other stocks, both in the local market and on the LSE, showed neutral performance. We note that Solidcore did not react to the rise in gold prices, which jumped noticeably yesterday, sending signals of a possible trend reversal. We recommend paying attention to CORE shares, as a delayed reaction on AIX may already appear in the current session.
Currency. The dollar is again in a local downswing—today USDKZT quotes are falling to 467.3 tenge. Recall that there is a strong support level for the dollar around 466 tenge.