Our Comments and Expectations
External Background.
The S&P 500 fell by 0.4%, marking its fifth consecutive session of gradual decline. Markets remain in wait-and-see mode ahead of Powell’s Friday speech and show little activity. The address is scheduled for 10:00 a.m. New York time (7:00 p.m. Kazakhstan time). Atlanta Fed President Raphael Bostic stated that he sees only one rate cut as appropriate this year. Jeffrey Schmid, President of the Kansas City Fed, noted that inflation risks still outweigh risks to the labor market. On the index map, technology and large-cap stocks again ended in the red. U.S. initial jobless claims reinforced signs of a labor market slowdown: weekly claims rose by 11,000 to 235,000, well above expectations (225,000). On the other hand, the S&P Global manufacturing PMI rose to 53.3 in August from 49.8 a month earlier, signaling a shift from contraction to growth. Following this report, the probability of a Fed rate cut in September declined to 70% from 80% in the swap market. In Europe, indices closed near neutral levels: Stoxx 600 ended the day flat after two strong sessions of growth. In Asia this morning, Hang Seng and Nikkei 225 posted modest gains, while China’s mainland CSI 300 jumped 1.9%, reaching its highest level since October 2024.
Bonds.
The yield on 10-year U.S. Treasuries is slowly rising amid reduced expectations of monetary easing in September. Corporate bonds are showing declines.
KASE Index.
KASE experienced a correction day: quotes continue to shed technical overbought levels. As we noted yesterday, in a similar previous case the index lost 1.8% before RSI fell to 65. Currently, RSI has dropped to 65.3, and the index is down 2.2% from its highs, indicating a possible end to the correction in the near term and a shift to a sideways trend.
Index Stocks.
Yesterday, most stocks declined, except for the relatively stable Kcell, KEGOC, and KazTransOil. The largest correction occurred in BCC shares, which is logical given their prior rally. Kaspi fell 1.8%—a smaller drop than on Nasdaq, where the decline was sharper. However, ADS gained 1.2%, leaving a 1.2% price difference in favor of KASE shares. A more noticeable gap appeared between Halyk Bank’s GDRs and its local shares: on the domestic market they are priced 5.6% higher. This morning, the index opened down 0.3%, which may signal a slowdown in the correction. The steepest drop is seen in BCC (-0.9%), while the biggest gain is in Kazakhtelecom (+0.45%).
Currency.
The U.S. dollar is trading at 537.3 tenge this morning. USDKZT has been gradually declining for four consecutive sessions, but not enough to significantly change the technical picture of trading.