Our Comments and Expectations
External Background. The S&P 500 closed neutral. Trading opened with a decline, which prices attempted to recover from for most of the session, partially bouncing back towards its end. Investors are now focused on a busy week of financial reports. Texas Instruments, the largest producer of analog chips, gave a weak forecast despite beating analysts' expectations. Starbucks lost 4.15% in post-market trading and withdrew its 2025 forecast after sales fell by 7% in the fourth fiscal quarter, marking the third consecutive quarter of decline. McDonald's shares fell by 5.8% after the session closed when it was revealed that the Quarter Pounder (also known as the Royale with Cheese) was linked to an outbreak of E. coli. Ten people were hospitalized, and one died. According to Citigroup strategists, the index has reached levels that previously led to a 10% decline. Long positions on futures tied to the index appear "particularly stretched," they noted. Goldman Sachs states that the euro could fall by 10% against the dollar if Donald Trump and the Republicans win the election and implement tariffs and tax benefits. In Europe, major indices dropped by 0.2%. ECB President Christine Lagarde stated that the direction of rates is clear, but the pace of rate cuts is yet to be determined. She did not rule out the possibility of larger steps in easing monetary policy. Meanwhile, the IMF lowered its forecast for global economic growth for next year to 3.2% and warned of increasing risks—from military conflicts to protectionism. The inflation forecast for the current year remained unchanged at 5.8%, and for next year at 4.3%. Morning trading in Asian markets was calm. Oil rose by 2% and surpassed the $75 mark.
Bonds. The yield on 10-year U.S. government bonds continued to rise yesterday at the same rapid pace as before. Pimco suggested that investors should avoid the "temptation" of moving to overbought positions in high-yield countries, prioritizing bonds of low-risk countries with reasonable valuations.
KASE Index. The KASE index rose by 0.2%, holding a moderate trading session. We note a decrease in the positive impact from our GDRs and ADSs.
Index Stocks. No significant changes were observed among local market stocks, except for Kcell shares, which rose by 2%, exited the sideways trend, and updated historical highs. Depositary shares of Kaspi rose on Nasdaq, preventing them from returning to previous technical levels, which we consider positive for the stock. On the other hand, we did not see continued growth in the depositary receipts of Kazatomprom and Halyk Bank, which is not critical overall but will not positively affect stocks during the current trading session.
Currency. The U.S. dollar rose in the morning after testing support at the 50-day moving average in the USD/KZT pair. The U.S. currency also continues to strengthen against major global currencies but shows a decline relative to the ruble.