Our comments and expectations
External Background.
The S&P 500 fell by 0.6% during the main session. It is noticeable how the quotes are hitting a resistance level, which is the previous historical high. The main event for U.S. investors occurred after the market closed, as Nvidia published its report at that moment. The company did not meet the high expectations; revenue growth rates slowed but still amounted to an impressive 122%. Market players agree that, all else being equal, the company is showing strong results but is under too much scrutiny. Nvidia indicated that it is working to address production issues with its new Blackwell chip, and the board approved an additional $50 billion for buybacks. Post-market quotes fell by 6.9%, and futures on the S&P 500 index are currently trading down by 0.3%. Other IT giants, Salesforce and CrowdStrike, released reports that exceeded analysts' expectations. In Europe, the Stoxx 600 and DAX rose by 0.3-0.5%. The British FTSE 100 closed neutrally. In the morning, Japanese and Chinese indices are trading neutrally, while the Korean Kospi is declining. UBS has lowered its GDP growth forecasts for China this year and next to 4.6% and 4%, respectively, citing a deeper-than-expected slump in the real estate market. Oil continued its correction yesterday despite a decrease in U.S. inventories and a halving of supplies from Libya. This morning, Brent is trading at $77.7. According to the EIA, U.S. crude oil inventories fell by only 846,000 barrels last week compared to the 3.4 million estimated by the API.
Bonds.
The bond market has seen calm for the second day. Pimco believes that debt in the local currencies of developing countries will provide "the greatest value" once the Fed begins to cut rates.
KASE Index.
The KASE showed another rather modest session. Trading volume amounted to 256 million tenge, which can also be considered a moderate result. Half of the stocks in the index showed near-zero price deviations; however, our GDRs turned out to be quite volatile.
Index Stocks.
The leader of the decline yesterday was Kazatomprom, whose GDRs fell by 4.8%. We did not notice any strong background news that could have pushed the stocks back so significantly. Recall that relatively recently the quotes broke above their 50-day average. On the other hand, the stocks (of the entire sector) may have been affected by uranium prices dropping below $80. ADS Kaspi also showed a decline, as they have been unable to break their 50-day average since August 15. We raised the target price for Kaztransoil to 1130 tenge (from 1110 tenge) after a neutral report and the conducted Investor Day.
Currency.
Today, the dollar is trading at 481.8 tenge, which is slightly above yesterday's value. It was announced today that the National Bank kept the rate at 14.25%, thereby completing the cycle of monetary easing.