Our comments and expectations
External background. The S&P 500 index opened lower but recovered by the end of the session. The technology sector once again dominated the index map: Amazon gained 4%, Nvidia rose 2.2%, and Palantir added 3.3% (but fell in after-hours trading following its earnings report). The trigger for the sector was the news that OpenAI will pay Amazon Web Services $38 billion for access to hundreds of thousands of Nvidia GPUs under a seven-year agreement. Meanwhile, the private Institute for Supply Management (ISM) report showed that U.S. manufacturing activity declined for the eighth consecutive month in October, while inflationary pressures continued to ease. Chicago Fed President Austan Goolsbee noted that he is more concerned about inflation than employment. Mary Daly stated that officials should "remain open-minded" regarding the possibility of a rate cut in December. According to Goldman Sachs strategists, U.S. corporate earnings for the third quarter exceeded forecasts, showing one of the strongest results on record. In Europe, indices closed mostly neutral, except for the DAX, which rose 0.7%, recovering previous losses. This morning, Asian markets are down between 0.5% and 2.2%. S&P 500 futures are falling by 0.8%. Oil is trading at $64.7 per barrel. Reports suggest that OPEC+ plans to refrain from raising production quotas in the first quarter, following a moderate increase next month, due to expectations of an oil surplus.
Bonds. U.S. 10-year Treasury yields are rising after comments from Fed officials. Corporate bonds showed a notable decline in prices.
KASE index. KASE rose for the third consecutive session, adding 3.3% since October 29. Quotes have reached resistance levels, beyond which lie new all-time highs. Considering these levels and the weak start to trading, we believe the index is unlikely to break through resistance immediately. However, if BCC maintains its strong growth momentum, it could single-handedly drive the index higher.
Index components. BCC once again led gains in yesterday’s session. Today’s opening is calmer, without an explosive rally at the start. Still, the stock has room for local growth, as it has not yet reached the resistance level slightly above 5,300 tenge. Other index components show mixed but moderate price changes, indicating an overall neutral market dynamic. At the same time, GDRs were in negative territory yesterday — Kazatomprom and Air Astana fell by 1.5%.
In the U.S. market, investors locked in profits by selling uranium stocks, causing the URA and URNM ETFs to drop 4.6–5.6%. An interesting development this morning is the potential SPO of Halyk Bank through the sale of a stake by ALMEX, reportedly aimed at increasing the liquidity of the shares and GDRs.
Currency. The dollar sell-off continues, breaking through local support levels. USDKZT is falling to 520 tenge in morning trading and may reach the next support level at 519 tenge. The RSI on the daily chart indicates significant oversold conditions.