External Background:
The S&P 500 rose by 0.62% and closed above the 5,500 mark for the first time in history. Technology companies led the growth, with the NASDAQ showing an even greater result compared to the S&P 500, rising by 1%. Among individual companies, Tesla stood out, increasing by 10.2% yesterday and by 25% since June 26. Yesterday, Powell made dovish comments, stating that there was a "significant" step toward better balance between supply and demand for workers. He described the labor market as strong but mentioned that it is cooling accordingly. Powell's remarks are perceived as optimistic regarding inflation rates, while being increasingly cautious about the balance of risks and employment. This week, the focus will be on the employment report due on Friday—economists expect employers to have added around 195,000 jobs in June, with the unemployment rate holding steady at 4%. Earnings season for the second quarter will begin around mid-July. Strategists at Deutsche Bank AG expect U.S. earnings to grow by 13% above the average in the second quarter, driven by gains in mega-cap and technology stocks. European indices were down by 0.3-0.6% yesterday. Asian markets opened higher this morning, with the Japanese Nikkei 225 approaching historical highs, the Hong Kong Hang Seng rising by 1.1%, and the Korean Kospi by 0.5%. In China, service sector activity grew at its slowest pace in eight months in June. The commodity market showed little change.
Bonds:
The yield on 10-year U.S. Treasuries slightly decreased after a sharp rise on Monday and is currently near its 50-day moving average. Corporate bonds increased in price.
KASE Index:
The local market had a rather sluggish session yesterday. Stocks showed little volatility, except for Kaspi, and trading volumes in the index fell to their lowest levels since February 7 of this year.
Index Stocks:
The largest price decline was seen in Kaspi, with quotes down by 1.2%. This was expected, considering that previously the ADS on the NYSE failed to surpass April highs. Additionally, the weakening of the tenge has stalled, which should also affect the upward momentum of stocks in the local market. On the other hand, the ADS showed growth yesterday after a three-day decline, hinting at a pause in the downtrend. Kazakhtelecom is showing a bearish daily candle at the opening today. Since the session is just starting, the candle's shape may change, but we will lower the local rating for the stock to neutral for now, as the probability of a pause in growth increases. The GDR of the National Bank showed a decrease of 1%, correlating with the declining European indices.
Currency:
The USD/KZT is trading at 427.5 on the forex market today. The dollar's growth has stalled, but there is also no sharp reversal of the tenge, so the situation looks moderately volatile without sharp movements.