Our comments and expectations
External background. The S&P 500 declined yesterday immediately after the opening of trading and moved into a sideways trend at near-session lows. The trigger was a message from a senior White House official that they had signs of an imminent Iranian ballistic missile strike on Israel. He also said that the United States actively supports preparations to protect Israel from a strike that will have serious consequences for Iran. Last night it became known that Iran had indeed fired ballistic missiles. The S&P 500 volatility index rose to 19.27 points, which is the highest since September 11. As has often happened lately, the most sensitive stocks in the technology sector have gone into the red. In addition to the aggravation in the Middle East, the strike of longshoremen at the docks has also become a pressure factor, since the longer traffic in large container ports in the United States is closed, the more economic losses it causes. JPMorgan estimates the shutdown will cost $4.5 billion per day. Meanwhile, U.S. manufacturing activity contracted in September for the sixth month in a row, reflecting weak orders and declining employment. On the other hand, the JOLTS report showed that the number of vacancies rose in August to a three-month high. In Europe, the leading indexes lost less – from 0.4% to 0.8%. The eurozone CPI rose 1.8% year-on-year in September, as expected, falling below the 2% target for the first time since 2021. In Asia, China is back in the spotlight in the morning. Hong Kong's Hang Seng is up 4.8% at the moment, while mainland markets are still closed due to the celebration of Golden Week. Japan's Nikkei 225 and Korea's Kospi are falling following the US stock exchanges. Futures for the S&P 500 index show a decrease of 0.3%. Oil rose noticeably yesterday and is trading at $74.6 today. However, this does not yet allow it to break through the resistance at $75.9. Bonds. U.S. government bond yields declined as investors sought safe haven assets amid the rise of the VIX. Corporate bonds were also in the red. The KASE. KASE index dropped by 1% yesterday. This worsened the technical picture of the index, as the quotes went below the local support level at 5,150 points. On the other hand, the next support levels are already in the area of 5,100 points, so we do not expect the same deepening in the correction today. Index shares. The greatest damage to the index was caused by Kaspi, which continued to decline and reached the levels of May this year. It is not yet clear whether this is still the impact of the shortists' report, or whether investors have other reasons to sell shares. Nevertheless, we are now closely monitoring the possibility of signs of a rebound, as the securities have moved into the oversold zone. The decline in other stocks did not provide any new surprises. Currency. The dollar is rising against the tenge after bouncing up from its 50-day moving average. It is also worth bearing in mind that the rebound occurred from the lower boundary of the ascending channel on the USDKZT chart, which supports the dollar.