Our comments and expectations
External background. The S&P 500 had a volatile session yesterday and closed down by 0.8%, continuing its downward trend. Since its peak on February 19, the index has lost 9.3%. An attempt to rebound in the second half of the session was supported by Trump’s comments, who stated that he does not see a recession in the U.S. economy, downplaying Wall Street’s concerns over the trade war. The White House announced that 25% tariffs on steel and aluminum will take effect for Canada and other countries, as Trump backed away from threats of imposing 50% duties. The VIX index slightly declined from last year’s August highs. On the index heatmap, growth was mostly driven by mega-cap stocks. Citigroup, in its latest report, downgraded U.S. equities from "overweight" to "neutral." Today, investors are awaiting U.S. inflation data for February. According to Bloomberg's survey of economists, CPI is expected to rise by 0.3% compared to January. Although this is below the 0.4% increase in January, the pace of price growth remains elevated. The annual figure is projected at 3.2%. About 41% of investors surveyed by 22V Research expect the market reaction to the data to be "mixed/insignificant."
The European Stoxx 600 fell more than the S&P 500 but is only beginning to test its 50-day moving average, whereas the S&P 500 broke below that level back on February 21. This morning, Stoxx 600 futures are up by 0.75%. In Asia, trading opened moderately positive, led by South Korea’s Kospi (+1.4%). S&P 500 futures are adding 0.33%.
Bonds. The yield on 10-year U.S. Treasuries rose to 4.29%, while high-yield corporate bonds declined to levels seen in January.
KASE Index. The KASE index closed down 1.4% yesterday. This correction wiped out gains made since February 27 and strengthened the signals of a potential "head and shoulders" pattern formation.
Index stocks. At the start of the session, the index was under pressure due to a sharp decline in KMG shares; however, they quickly recovered and even closed slightly in the green. The main laggards of the day were Kaspi and Kazatomprom shares. We recently published a review of Kaspi's latest report, rating it as moderately positive, but nevertheless, the shares are returning to pre-rebound levels seen on February 12–13. Kazatomprom remains under pressure amid speculation that sanctions on Russia may be lifted, which could bring significant volumes of Russian uranium back to the market. The top gainer was Halyk Bank's GDRs, which previously lagged behind KASE-listed shares due to the strengthening of the tenge. A 3.5% increase allowed the stock to hit new all-time highs.
Currency. Yesterday, the USDKZT pair closed near 488.1 tenge. This morning, a slight increase of 0.3% to 489.6 tenge is observed. A similar trend is seen in global markets, where the DXY index shows a modest rebound from the support level of 103.45 points.