Our Comments and Expectations
External Background. The S&P 500 lost 0.6% yesterday amid the escalation of the US-China trade conflict, halting the local growth wave. Financial and technology sector companies, particularly semiconductor manufacturers, were in the red. Nvidia dropped by 2.55% as China launched an investigation into the American chipmaker over potential antitrust violations related to its 2020 acquisition of Mellanox Technologies. At the same time, Chinese stocks traded in the US rose due to signals from Beijing of more aggressive economic support in 2025. Today, investors are awaiting inflation data. Bloomberg economists' median forecast expects a fourth consecutive increase in the core Consumer Price Index (CPI) in November, with a 0.3% month-over-month rise and a 3.3% year-over-year increase. In Europe, indices are showing signs of growth exhaustion: the Stoxx 600 gained 0.14%, but formed a bearish candle, while the DAX dropped by 0.2%, ending a seven-day growth streak. On the Chinese market, an interesting dynamic was observed this morning: the CSI 300 opened with a 3.2% increase but retreated to 1.3%. Authorities signaled bold measures to stimulate the economy in preparation for a potential trade war with the US. The Politburo promised a "more active" fiscal policy and a "moderately loose" monetary policy. There were also reports of export growth in November, but imports unexpectedly declined due to weak domestic demand. Oil prices rose to $72.1 in response to the overthrow of Bashar al-Assad. Citi expects oil prices to drop below $60 by mid-2025 in most scenarios.
Bonds. The yield on 10-year US Treasury bonds rose yesterday but remained below its 50-day moving average. Corporate bonds showed a slight decrease.
KASE Index. The KASE index declined for the second consecutive session, continuing to show signs of a pause in the rally. Thus, the local market is following the trends of leading US and European indices. We believe that the weakening dynamics, at worst, will lead to a broad sideways trend.
Index Stocks. About half of the stocks in the index showed a decline, but no more than 0.8%. Growth leaders such as BCC, Kazatomprom, Kazakhtelecom, and Kcell transitioned to a local sideways trend, and the National Bank may follow suit. The upward trend is still intact for KazMunaiGas stocks, although the Relative Strength Index (RSI) indicates the stocks are in the overbought zone at 80 points. On the LSE, the National Bank showed the largest growth, but this did not affect the technical picture. Air Astana is growing and testing its 50-day moving average. Kazatomprom lost 2.4%, along with other stocks in the global uranium sector.
Currency. Yesterday's attempt to push the dollar higher was restrained, and today the currency is trading at 509.2 on the forex market and 509.7 on KASE.