Our Comments and Expectations
External Background. Yesterday, the S&P 500 closed flat. The Nasdaq rose by 0.7%, while the Dow Jones declined by 0.2%. The media began discussing the exhaustion of the rally following the improvement in U.S.-China relations. In some interviews with market traders, opinions emerged about a sharp shift from oversold to overbought conditions. On the other hand, market experts noted this as a natural pause. Citi and JPMorgan are betting on a short-term rebound of this year’s biggest underperformers — small-cap companies, tech equipment producers, and homebuilders — as trade tensions ease.
Today, market participants are awaiting data on the Producer Price Index (PPI), retail sales, and industrial production. Federal Reserve Vice Chair Philip Jefferson stated that tariffs and related uncertainties could slow growth and increase inflation, though his overall speech was dovish.
In Europe, indices posted a slight decline yesterday, and today the Stoxx 600 is also down by 0.3%. ECB Governing Council member Joachim Nagel warned that financial markets are on the verge of collapse following early U.S. trade announcements. This morning, Asian markets are showing noticeable declines, with major indices falling by 0.6% to 1%. According to the Ministry of Commerce, China has suspended export controls on 28 American companies for 90 days starting Wednesday. Oil prices retreated from the $66.6 level and are trading at around $64.5 per barrel this morning. U.S. crude oil inventories rose by 3.45 million barrels last week, according to the EIA.
Bonds. Yields on U.S. 10-year Treasuries resumed growth and reached 4.54% yesterday. Corporate bonds slightly declined.
KASE Index. The local market had a relatively calm session yesterday. There was no notable volatility in Kaspi and Kazakhtelecom shares, while strong performance was seen in securities listed on the LSE and Nasdaq.
Index Stocks. Kazakhtelecom shares began to rise again yesterday and became the top gainer. This morning, quotes are up another 0.8%. Kazatomprom’s GDRs added 3%, reaching their highest level since March 20. The next major resistance levels could be at $37.8 and $39.3. On the local market, Kazatomprom shares are up 1.5% this morning. We wrote about the growth triggers for the uranium producer in our previous review. Among other foreign-listed stocks, Halyk Bank GDRs rose by 1.3%, and Kaspi added 1.6%. Notably, the latter bounced from its recent low of $80.7, which can be seen as a support level.
Today at 3:00 PM, Kazakhtelecom’s Annual General Meeting (AGM) will take place, drawing attention from investors due to the decision regarding large dividends — over 26,000 tenge per share.
Currency. Today, the U.S. dollar began strengthening against the tenge for the first time after three consecutive sessions of decline. This is happening amid falling oil prices, although the DXY dollar index has not shown growth. The USDKZT pair failed to hold below the 50-day moving average, so we believe the dollar could resume its rise from current levels and reach 516 tenge in the short term.