Our comments and expectations
External background. The S&P 500 rose 0.9% on Friday and recovered last week's losses. In last month's U.S. employment report, investors saw a stronger labor market than expected. Employers added 254,000 jobs in September — the most in six months — and the unemployment rate fell to 4.1%. The report also showed a slowdown in wage growth: it increased by 0.2% in October compared to the previous month, which may indicate a decrease in inflationary pressure. This prompted traders to reconsider their expectations about the Fed's policy, assuming less than 25 basis points of a rate hike in November. Market veteran Ed Yardeni believes that politicians "don't need to do more" this year.Meanwhile, the market is preparing for the start of the reporting season at the end of this week. The companies are expected to report a 4.7% increase in third-quarter profit, compared with a forecast of 7.9% in July. In Europe, the quotes of the leading indices increased by 0.4–0.8%. According to the Sueddeutsche Zeitung, Germany expects the economy to contract by 0.2% this year, although the source of this information has not been disclosed.Hong Kong's Hang Seng is up 1.1% this morning, but a downward divergence has already formed on the daily and 4-hour charts. Invesco believes that some stocks have become "really overvalued," and Nomura warns of a possible "collapse." On the other hand, Fidelity remains optimistic. Japanese and Korean stock exchanges also showed good growth. Oil rose to almost $80 on Friday, but then fell back to $78 after President Joe Biden tried to dissuade Israel from attacking Iran's oil fields. Bonds. The yield on 10-year US government bonds rose sharply after a strong employment report and lower expectations for Fed policy easing. In addition, the quotes broke through the 50-day moving average. The KASE. KASE index completed the last session of last week successfully, laying a potentially good foundation for the current week. The quotes showed growth, starting from the medium-term trend line, which may lead to further upward movement. Index shares. On Friday, local growth was demonstrated by Kcell and Kazakhtelecom securities, which caused investors to speculate about possible corporate events. This is not surprising, given that there is not much time left until the end of the year, and there has been no news about deals or special dividend payments yet. From the point of view of technical analysis, these jumps did not change the local situation in securities. Kazatomprom showed the greatest growth on the LSE, which pushed off from the long-term upward trend line. Recall that there is an important horizontal resistance line at $39.3, and until the GDR overcomes it, growth will remain local. Currency. The dollar is getting more expensive along with an increase in the yield of US government securities. In the morning, USDKZT reaches 484.4 tenge. The local resistance level is at 484.7 tenge, and the longer–term resistance is at 486 tenge.