Our Comments and Expectations
External Background. The S&P 500 closed neutral yesterday, failing to get closer to its all-time highs. Once again, all eyes were on Jerome Powell, this time during his testimony at Capitol Hill. The Fed Chair stated that the U.S. central bank is still assessing the impact of tariffs on consumer prices. He also noted that the U.S. has the strongest economy in the world and that it makes sense to proceed cautiously in times of uncertainty. Meanwhile, The Wall Street Journal reported that Donald Trump might announce Powell’s replacement in September or October. The market interpreted this as a signal for earlier and more significant rate cuts, especially since Trump has repeatedly urged Powell to lower borrowing costs. At the same time, strategists at JPMorgan Chase & Co. reaffirmed their view that the U.S. stock market is on track to hit new records this year, supported by a resilient economy and strong consumer activity. On the geopolitical front, Trump said the U.S. would meet with Iran next week, though he questioned the need for a diplomatic nuclear agreement. Analysts at Goldman Sachs cautioned that there are strong reasons to approach recent gains with skepticism. In Europe, indices fell by 0.5–0.7%. In Asia, the Hang Seng Index declined for the first time after three consecutive days of gains. Japan’s Nikkei 225 rose by 1.5%. Brent crude remains below the $68 per barrel mark.
Bonds. The yield on 10-year U.S. government bonds and corporate bonds saw almost no changes yesterday.
KASE Index. The KASE index rose by 0.2% yesterday. We had expected a slightly stronger performance, but this is not critical — we continue to see signs of local consolidation in the market.
Index Stocks. Stock price volatility was moderate, and trading volumes dropped to their lowest levels since June 13. The most significant price fluctuation was observed in Air Astana shares, which are still under pressure following the recent registry closure. However, the dividend gap corresponds to the dividend yield, and the quotes are still holding above local support levels. The biggest gain was seen in KazMunayGas shares, even though oil prices didn’t show positive dynamics during the session. The shares closed at session highs, but trading volumes were significantly lower compared to previous sessions. To reach new highs, the stock needs to grow by a little more than 5.3%. KZTO and KZTK shares rose by 0.6–0.7% and are both in a sideways trend after the dividend record date. On the Nasdaq, Kaspi rose by 0.9%, marking its second consecutive day of gains and rebounding from support levels — just as we expected. Growth momentum in uranium sector stocks has slowed, but both industry ETFs and Kazatomprom GDRs remain within upward trends.
Currency. The USDKZT exchange rate dropped to 517.6 this morning due to dollar weakness in global markets. The U.S. dollar index (DXY) fell to a three-year low following reports about a potential Trump candidate to replace Powell.