Our Comments and Expectations
External Background. Last week, the S&P 500 ended neutral, showing almost no change in price. Meanwhile, the tech-heavy Nasdaq gained 0.45%, setting new records. This was partly due to Microsoft shares rising 1.8% after the company avoided a potentially large antitrust fine from the EU by pledging to reduce and separate pricing for different Office product packages. Tesla shares also gained 7.4% after the board chair gave neutral comments regarding Elon Musk’s political activity. Musk had previously been offered the largest compensation package. In the U.S., consumer sentiment by the University of Michigan fell for the second consecutive month in September, dropping from 58.2 to 55.4 — the lowest since May. Against this backdrop and the labor market situation, investors are pricing in a 75 bps rate cut by year-end. In Europe, indices also closed neutral after the ECB’s expected decision to keep rates unchanged on Thursday. The main story remains France, where the fifth prime minister in two years was appointed, and Fitch assigned the country its worst-ever credit rating. In Asia this morning, Hang Seng rose 0.2% and CSI 300 gained 0.4%. Japan’s Nikkei 225 was closed for holidays, while Korea’s Kospi also grew 0.4%. In the commodities market, oil prices edged higher after Ukrainian drone attacks on Russia’s largest western port. On the other hand, concerns about weak demand following U.S. labor market data likely pressured prices.
Bonds. U.S. 10-year Treasury yields rose slightly on Friday after dropping to 4% on Thursday, the lowest since April. In Europe, French and German 30-year yields, which had been declining all week after peaking on September 3, rebounded on Friday.
KASE Index. On Friday, the KASE index briefly renewed historical highs. However, it was soon slightly sold off and has not yet broken above the local horizontal resistance level.
Index Stocks. Shares of KazMunayGas, Kaspi, and Halyk Bank rose more than 1% yesterday. The strongest growth came from KMG shares, which gained 2.4% after two weeks of prolonged and slow decline. At one point, quotes were up 6.1%, but trading volumes were relatively small, and the price has not fallen below the 19,500 level, remaining in a sideways range. Halyk Bank rose along with its GDRs on the London Stock Exchange, maintaining a steady bullish trend. Kaspi, on the other hand, fell 0.6% on Nasdaq and tactically looks less attractive for buying compared to Halyk Bank.
Currency. On Friday, the dollar rose by exactly 1 tenge, and this morning it continues its slow upward move for the fifth straight day, breaking above the channel boundaries. This is likely to lead to a return toward the 544 tenge level.