Our comments and expectations
External background. Yesterday, U.S. trading opened with a significant drop — up to 1.5%. The decline was triggered by Microsoft’s report, which again raised concerns about massive AI capital expenditures and their low profitability. By the end of the session, shares fell 9.9%, marking the largest one-day drop since 2020. Apple’s report was more positive, showing revenue above expectations. According to Bloomberg Intelligence, large tech companies are expected to show only 20% profit growth for Q4, the slowest pace since early 2023. Meanwhile, Trump stated he would announce his candidate for Fed chair “next week,” but this morning news emerged that the president supports Warsh, a former Fed governor and known hawkish policy advocate. In Europe, the German DAX index dropped significantly — by 2.1%. Commodity prices continued to rise yesterday, but this morning the trend meets resistance. Oil is down 2.1%, gold 3%, copper 3.2%. Besides the expected technical correction, the trigger may have been a malfunction at the London Metal Exchange (LME). Delegates stated that OPEC+ must ratify the last part of the oil production cut this quarter at an online meeting on Sunday. Asian markets show declines this morning, with Hong Kong’s Hang Seng losing the most — 2%. S&P 500 futures fell 0.7% following news that Trump supports Warsh.
KASE Index. KASE rose 1% yesterday but is declining by a comparable amount at today’s session opening.
Index shares. In yesterday’s session, KazMunayGas rose 3.2% after we noted the local market’s lack of reaction to rising oil prices. At today’s open, KMGZ adds another 1.6%. Futures trading showed Brent testing $70 per barrel, but unsuccessfully — currently trading around $68.3. Kazatomprom rose 2.8% yesterday but is down 4.5% today. Today’s results on the LSE will be interesting: some GDRs gave bearish technical signals, although uranium itself has not yet declined. Overall, some previously noted commodity market risks materialized: after such rapid growth, a local technical correction was necessary to relieve tension and overbought conditions. Such a correction could have occurred even without accompanying negative news. Some disappointment comes from declines in the National Bank’s shares and GDRs in recent sessions (-1.1%), but this does not spoil the medium- and long-term technical picture, as prices remain above the previously broken key level of 380 KZT. Today, Kaspi shares are also down, failing to overcome $81 on Nasdaq.
Currency. The dollar is declining today, anticipating the upcoming tax period. Forex buyers are holding the round 500 KZT level, which USDKZT touched earlier today. Currently, trading occurs around 501 KZT.