Our Comments and Expectations
External Background: U.S. market trading showed moderate declines ahead of the election. Trading volumes fell to the lowest levels of the past four sessions. Polls continue to show a tight race with no clear leader in the U.S. presidential election, amid the upcoming Federal Reserve decision on interest rates. Citi stated that optimism over a potential rate cut outweighs election concerns. Two U.S. senators have called on the Fed to cut the rate by 50 basis points, which would likely assist families by reducing housing prices and mortgage rates. Harris’s campaign chair noted that “we may not know the results” for several days. Meanwhile, analysts agree that the market could see growth over the remainder of 2024. According to Bespoke Investment Group, the S&P 500 index typically shows positive returns after elections, with an average year-end gain of 3.3% since 1990. In Europe, leading indexes fell by 0.3-0.6%. This morning in Asia, the Chinese market is rising: the Hang Seng is up 1.5%, and the CSI 300 is up 2.4%. The trigger was the Caixin index in the services sector, which rose to 52 points in October from 50.3 in September. Additionally, Chinese Premier Li Qiang expressed confidence that the government will be able to achieve economic recovery. Oil prices rose to $75, with reports that OPEC views short-term global oil demand positively and forecasts consumption to grow to 120 million barrels per day by 2050. Meanwhile, Tropical Storm Rafael has formed in the Caribbean, leading to evacuations from offshore oil and gas platforms in the Gulf of Mexico.
Bonds: The yield on 10-year U.S. Treasury bonds declined yesterday from multi-month highs, while corporate bonds posted gains.
KASE Index: The KASE index has shown nearly neutral results for three consecutive days, with intraday price fluctuations. This mirrors the general trend observed in external markets during U.S. election week.
Index Stocks: The largest decline was in BCC stock, which attempted to break out of its sideways trend on October 23-24 but soon returned to a different range. Key resistance levels for this stock are currently around 2,000 tenge. Kazatomprom showed the largest gain, although its London trading quotes declined by 2.3%. In general, uranium company stocks have seen worsened conditions: the Sprott Uranium ETF has dropped by 13.8% from its local highs on October 18 and is currently supported by its 50-day moving average. At 2:30 p.m. Astana time today, Air Astana will hold a conference call to discuss its financial results.
Currency: The dollar is stable against the tenge this morning. Yesterday, the growth of the U.S. currency was restrained, and today the USDKZT is trading at 488.6 on Forex. The dollar index shows a slight decline, while the USDRUB pair approached 99 yesterday, though today the ruble is showing strengthening.