Our comments and expectations
External background. The S&P 500 lost 0.18% yesterday. The index quotes received support due to the stability of the technology sector, while the rest of the sectors remained in the "red zone". The industrial Dow Jones fell by 0.8%, while the Russell 2000 index of small-cap companies fell by 1.6%. Bloomberg notes that the S&P 500 has never declined for two consecutive sessions over the past 30 sessions. Meanwhile, the market is preparing for a busy week of reports, where about 20% of S&P 500 companies will present their results. The latest Bloomberg survey shows that respondents consider the financial results of companies (45%) more important for the stock market than elections (39%) or even the policy course of the Fed (16%). Mary Daly from the Fed said that the regulator has no reason to stop cutting rates. Neil Kashkari and Jeffrey Schmid argued for slower increases in the coming quarters, while Lori Logan urged caution. In Europe, the indices showed a more significant decline: the German DAX and the French CAC40 each lost 1%. According to Peter Kazimir, a member of the ECB's Governing Council, the central bank remains flexible ahead of the last meeting in 2024. In the morning, Japan's Nikkei 225 and South Korea's Kospi have been declining by 1.3-1.4% in Asian markets. The Chinese market is closer to a neutral result. Oil has risen in price after China's steps to strengthen its economy. Gold has been trading in the black for the sixth consecutive session.
Bonds. The yield on 10-year US government bonds jumped to 4.2% yesterday, which is the highest since the end of July. Corporate bonds were in the red, especially emerging market bonds.
The KASE index. The KASE index had a good session yesterday, overcame the level of 5,200 points and reached its maximum since September 19. This area corresponds to the July sideways trend zone, so we assess it as a more serious level of resistance on the way to historical highs in the area of 5330 points.
Index shares. Kaspi and Kazatomprom shares were expected to be the leaders yesterday. However, on Nasdaq, Kaspi shares failed to break through the 50-day moving average and fell by 3.7%. Nevertheless, an upward breakout from the local consolidation still occurred, which leaves chances for a repeat test of the moving average. Kazatomprom shares and the uranium sector as a whole held up very well against the background of a decline in the industrial Dow Jones. A remarkable increase can be called the jump in the GDR of Halyk Bank by 2.6%, which allowed them to overcome the resistance level of $ 18. The next level is quite close, at $18.8. Nevertheless, we were impressed by the confidence of yesterday's growth of these securities. In addition, shares on KASE are now 3.7% cheaper than on the London Stock Exchange.
Currency. The USD/KZT exchange rate dropped to the 50-day moving average. Further, the tenge failed to strengthen, and in the morning it is trading at the level of 483 tenge per dollar.