Our Comments and Expectations
External Background. The S&P 500 rose by 0.4% yesterday despite ongoing news. The main focus was on the suspension of the U.S. Court of International Trade’s decision to block Trump’s tariffs — the appellate court granted a temporary stay, allowing time to consider the appeal. Simultaneously, another federal judge in Washington ruled a number of Trump-era tariffs on China to be unlawful, but also gave a 14-day grace period for filing an appeal. Meanwhile, Trump met with Fed Chair Jerome Powell for the first time since the inauguration and reportedly renewed pressure to encourage the Fed to lower interest rates.
U.S. GDP contracted by 0.2% year-over-year in the first quarter of 2024, reflecting a stronger-than-expected drag from foreign trade. Fed official Mary Daly stated that current monetary policy is in a "good position" to further reduce inflation. Markets are now awaiting data on the core PCE index, which is expected to have risen by 0.1% in April. Personal income and spending likely also slowed compared to the previous month.
In Europe, indices showed moderate declines. Futures charts show a 0.2% gain in the Stoxx 600 and DAX, while the S&P 500 futures are down by the same margin. In Asia this morning, the Hang Seng is down by 1.5%, and Japan’s Nikkei 225 has lost 1.2%. In an interview with Fox News, Scott Bessent said that trade talks with China have “somewhat stalled” and may require a phone call between Trump and Xi Jinping to make progress.
Oil prices are dropping to around $63 per barrel — the decline was triggered by reports that Kazakhstan announced OPEC+ plans to increase output at the upcoming Saturday meeting.
Bonds. Yields on 10-year U.S. Treasuries declined under the pressure of recent news. Corporate bonds are showing slow growth.
KASE Index. The KASE index closed lower yesterday as most major stocks ended in negative territory. The index began consolidating in the middle of its medium-term sideways trend, retreating from the resistance level around 5700 points.
Index Stocks. Shares of Halyk Bank and BCC fell by 1–1.3% yesterday. Both stocks are signaling a possible start of a local correction wave. Shares of Kazatomprom also declined, following the release of its Q1 earnings the previous day. On the LSE, Air Astana’s stock dropped, as the GDR register date was set for May 30, while the ordinary shares’ record date is June 24. The announced GDR dividend amounts to $0.287246 plus $0.141479 net (after taxes and fees).
At the opening of today’s trading session, Kazatomprom remains the main loser (-1.1%), and the KASE index is down another 0.5%.
Currency. Trading in USDKZT ended yesterday at 508.5 tenge. According to exchange data, at the time of writing, the last transaction occurred at 512.5 tenge per dollar, indicating a recovery of the U.S. currency after two consecutive sessions of decline.