Our Comments and Expectations
External Background. The S&P 500 failed to update historical highs three times in a row and decreased by 0.8% yesterday. The sectors that saw the most significant declines were semiconductor manufacturers, some healthcare companies, and energy. The trigger for the drop in semiconductor stocks was the news that ASML (the largest producer of lithography equipment for the microelectronics industry from the Netherlands) received only half of the expected order volume. The company also mistakenly published a weak report one day earlier and gave a negative revenue forecast. ASML's shares dropped by 16% in Amsterdam, which spooked investors in the U.S. markets — Nvidia fell by 4.7%, and AMD by 5.22%. Meanwhile, reporting banks showed profit growth based on quarterly results. Goldman’s profit grew by 45% due to an unexpected increase in revenue from stock trading and the revival of the investment banking business. BofA and Citi exceeded market expectations. Mary Daly from the Federal Reserve stated that the central bank should remain vigilant as inflation and the labor market are cooling, but expressed optimism about sustaining current economic growth. In Canada, inflation dropped more than expected, falling to 1.6% in September from 2% in the previous month. In Europe, major indices showed similar declines. In Asia, Japanese and South Korean stock markets saw declines in the morning, while Hong Kong’s Hang Seng rose by 0.3%. Hong Kong’s financial secretary Paul Chan stated that 85% of the buying volume in the Hang Seng index since the last rise came from U.S. and European investors. Brent oil fell slightly below $75 per barrel.
Bonds. The yield on U.S. 10-year bonds showed the largest one-day decrease since October 2. Corporate bonds remained neutral.
KASE Index. The KASE index rose by 0.4% yesterday. Market sentiment was moderately positive, but this morning, the local market is facing headwinds from external markets.
Index Stocks. Kcell remains volatile on the local market, and investors are speculating whether any news about the company's sale will be announced. Yesterday, its shares rose by 1.6%, but today they are down by 1% from the opening. Given the company’s high share in the index (13.8% — only HSBK, KMGZ, and KZAP have more), the volatility of the stock can directly influence the results of the KASE session. The largest decline was seen in ADS Kaspi on Nasdaq. The main impact likely came from the broader market, as the Nasdaq 100 index lost 1% yesterday. This data has a moderately negative impact on the stock prices, keeping ADS in a state of local consolidation. The technical risk for the stock is that the current dynamic resembles a bearish flag (Bearish Rectangle), so we are carefully monitoring support levels at $101.
Currency. After the sharp appreciation of the tenge on October 11, the dollar is trying to recover its position amid falling oil prices. Additional pressure comes from the rising U.S. dollar index (DXY) and the weakening ruble.