Our Comments and Expectations
External Background. On Thursday and Friday, the S&P 500 index saw minimal price changes due to election anticipation and key corporate and economic reports. The technology sector was slightly up, but the financial sector dragged the index down due to a drop in New York Community Bancorp shares, which reported weak results for the fourth consecutive quarter. Utility companies and real estate firms in the U.S. also showed losses. Politically, Kamala Harris received Michelle Obama’s endorsement and promises to improve the welfare of Black voters. Donald Trump, in contrast, aims to support first-time homebuyers and budding entrepreneurs. This week, the final one before the elections, the market will focus on Friday’s employment report and earnings results from Google, Meta, and Amazon. The five largest companies in the S&P 500 are expected to show an average earnings growth of 19% in Q3, marking the slowest pace in six quarters. Labor market forecasts indicate the addition of 110,000 new jobs in October, factoring in two hurricanes and a strike at the Boeing plant, with the unemployment rate expected to remain at 4.1%. Leading European indices were also neutral or showed slight growth. Moody’s downgraded France's credit outlook to negative on Friday due to "rising risk" from national debt and deficits. In Asia, Japan led morning trading with the highest gains, while other markets remained steady. The yen continues to weaken against the dollar. Brent crude oil is trading around $76 per barrel. According to the U.S. Commodity Futures Trading Commission, hedge funds have reduced their bullish bets on U.S. crude oil to the lowest level since 2010.
Bonds. U.S. 10-year Treasury yields remained around 4.24%. Emerging market bonds showed slight growth.
KASE Index. At the end of last week, the KASE index slightly retreated, nearly reaching the 5240-point mark, which previously held back market growth on September 19.
Index Stocks. Overall, trading was moderate for the market on Thursday. There was notable growth in BCC shares, which are emerging from a local consolidation zone lasting from September 23 to October 24. On the LSE, AIRA GDRs fell another 5.3%, hitting new lows and meeting local expectations. The quarterly report is expected soon, with the company announcing it will be released on November 5. Meanwhile, we slightly lowered the target price for Kaspi ADS but upgraded our recommendation from "Hold" to "Buy." The company met its forecasts for Q3. Regarding the acquisition of Hepsiburada, we believe this presents substantial growth opportunities for the company in a country with low e-commerce penetration. However, it also brings certain risks due to the cash purchase and the country's challenging economic conditions.
Currency. The dollar is rising against the tenge to 487, despite high foreign currency sales volumes this month. On Friday, the results of October’s transfers and the forecast for November will be announced.