Our Comments and Expectations
External backdrop. The key event on Thursday was the release of the June U.S. labor market report, which was published a day earlier due to the Independence Day holiday. The data came in significantly weaker than expected: the U.S. economy added only 57,000 jobs, compared with a consensus forecast of around 110,000–115,000. In addition, employment figures for April and May were revised downward by a combined 74,000 jobs.
The unemployment rate declined to 4.2%, although this was largely due to a reduction in labor force participation.
Markets interpreted the weak data positively, as they pushed back expectations for a Federal Reserve rate hike. Previously, investors had priced in the possibility of a rate increase as early as September, but following the report, the base-case scenario shifted toward December.
At the same time, sector rotation intensified within the market. The Dow Jones Industrial Average reached another record high, gaining approximately 1.1%, driven by defensive sectors such as utilities, healthcare, and consumer staples, as well as gains in Apple and Microsoft.
Meanwhile, the technology-heavy Nasdaq declined by around 0.8% amid a second consecutive day of selling pressure in semiconductor stocks.
The S&P 500 finished the session virtually unchanged.
Tesla shares fell nearly 7% despite reporting strong second-quarter delivery figures.
Gold prices jumped 2.3% as concerns about further rate hikes eased, while oil prices also posted modest gains.
In Europe, unlike the U.S. technology sector, major indices closed significantly higher after the eurozone unemployment rate fell to 6.2%, matching its record low.
Trading activity is subdued this morning as U.S. markets remain closed for Independence Day.
Asian markets are rebounding after yesterday's volatility in semiconductor stocks. South Korea's Kospi is up nearly 3%, Hong Kong's Hang Seng has gained 1.6%, and Japan's Nikkei 225 is higher by 0.8%.
KASE Index. The KASE Index declined by 0.43% yesterday, largely due to weakness in Halyk Bank shares, and did not receive support from Kazakh securities trading on international exchanges amid the significant strengthening of the tenge.
Index constituents. Halyk Bank shares were the main underperformers on Thursday.
The stock declined by nearly 2%, falling below an important horizontal support level.
At the same time, the bank's GDRs on the London Stock Exchange posted a slight gain, indicating that the decline in local shares was largely driven by the significant appreciation of the tenge.
In U.S. dollar terms, the stock continues to trade above its 200-day moving average, suggesting that it is still too early to speak about the beginning of a downward trend.
Another notable move was the 0.8% decline in Kazatomprom shares.
The nature of the decline was similar to that of Halyk Bank, as the company's GDRs in London actually posted gains.
However, in this case, local shares were trading at a higher premium relative to their GDRs.
On the positive side, KazMunayGas shares gained 0.6% and continue to rise gradually on a daily basis despite declining oil prices and the strengthening of the tenge.
Currency. The USD/KZT exchange rate declined significantly yesterday. The strengthening of the tenge is likely explained by the sharp reduction in foreign currency purchases for the Unified Accumulative Pension Fund (UAPF) in June.
In doing so, the National Bank effectively signaled that it does not intend to continue purchasing foreign currency at exchange rates in the KZT 485–490 range.
The Russian ruble posted a neutral performance yesterday, while the RUB/KZT exchange rate declined to 6.11.