Our comments and expectations
External backdrop. The S&P 500 rose 0.6%, posting an excellent weekly gain of 3.6% and setting several new highs. On Friday, investors’ attention was focused on the labor market report, which came with some surprises. Stocks and government bonds rose after data showed that U.S. employers unexpectedly cut jobs in July, and prior months’ figures were revised lower. Nonfarm payrolls fell by 23k last month versus expectations of roughly an 80k increase, while May–June data were additionally revised down by a combined 103k, signaling a weaker labor market than previously assumed. The unemployment rate declined to 4.1%. The report eased pressure on the Fed regarding rate hikes, and traders pared back expectations for a September rate increase. At the same time, Bank of America said investor optimism has become so excessive that it is time to start reducing exposure to risk assets. Over the weekend, news on Iran–U.S. relations was mostly negative. Iran rejected direct talks with the U.S., again putting forward an extensive list of demands for Washington as conditions for allowing shipping through this waterway. Trump said it will all work out; however, Washington will likely wait for Iran’s economic difficulties to intensify to secure a softening of its stance. Meanwhile, Abbas Araghchi said Iran is “very close” to an agreement with Oman to create a sea route through the Strait of Hormuz. In Asia, sentiment is moderately positive: Japan, Korea, and Hong Kong indices are up 0.6–2.1%. China’s CSI 300 is lagging on reports that inflation in China slowed from 1% to 0.5%, indicating the economy still lacks catalysts to boost consumer spending. S&P 500 index futures are up 0.15%, and oil is testing the 200-day moving average below $84 per barrel.
KASE Index. After a brief pause, KASE immediately resumed its rise, reaching its highest levels since April of this year. It is worth noting that there were no significant changes in trading volumes, and the advance remains typical for the local market—extended, but fairly unhurried.
Index stocks. On Friday, most local-market stocks posted gains, with the biggest increase in Kazakhtelecom. Riding the rally, the shares managed to reach the levels of January and March of this year. Recall that the likely trigger was Musin’s statements about mass layoffs of office staff and their replacement with AI, which could reduce the company’s operating costs. People’s Bank also continues to rise—quotes are closing in on the round level of 400 tenge. On Friday, the bank’s GDRs also rose 1.1%. KEGC shares have entered a small but still upward wave. A downward wave may be starting in ADS Kaspi, as the shares on Nasdaq failed to break above resistance levels and are now correcting.
Currency. The dollar failed to rise on Friday and today is under pressure from news that Ukraine agreed not to strike CPC infrastructure and tankers transporting Kazakh oil.