AEX starts trading the week probably slightly higher
Monday 15th March 2021 8:02 am
(ABM FN-Dow Jones) The Amsterdam Stock Exchange is expected to start higher on Monday. AEX futures indicated a slight gain of 0.2 per cent an hour before the stock market kicked off.
Despite barely losing 1 percent on Friday, the AEX index managed to climb 3.6 percent on a weekly basis to 677.41 points last week.
Sentiment was mainly lower on Friday as bond yields rose again after a number of days of stability. This mainly focuses on the annual yield on 10-year US government bonds. It was 1.63 percent on Friday, compared to 0.92 percent at the start of the year. The German counterpart is still negative at -0.30%.
Rising interest rates in the US is putting pressure on an important argument from the bulls, which is that there is no substitute for stocks given lower interest rates. On the inventory level, high returns have also led to a large turnover in the sector. This movement will continue for some time, according to technical analyst Roelof-Jan van den Akker of ING Financial Markets.
Investors view technology stocks in particular as being vulnerable to rising interest rates, as the relatively high valuations of these companies are often driven by future earnings that must now be discounted at a higher interest rate.
Banks and insurance companies, but also defensive nutritional values, caught the wind last week. For example, banks can finally achieve a negligible return on the funds entrusted to them in checking and savings accounts. The same applies to the premiums deposited.
On Thursday, the European Central Bank gave a signal with its interest rate decision that it will not tolerate higher interest rates in the euro zone, and announced that it will accelerate the current bond buyback program. The rise in interest charges is eroding the financial foundations of member states, which is mitigating the economic impact of the Corona crisis with massive aid packages that have led to a rise in the budget deficit and sovereign debt.
Stock markets were closed on Wall Street on Friday due to continued sector turnover. The tech-tech Nasdaq fell 0.6 percent, while the more traditional Dow Jones index managed to narrow its all-time high thanks to gains of just under 1 percent.
On Thursday, the Dow Jones also closed at a new record after President Joe Biden signed a $ 1.9 trillion coronavirus support package. The first checks, worth $ 1,400 in direct aid to the Americans, were cashed last weekend.
Last week, “meme” stocks, or stocks that are spreading rapidly among tens of thousands of private investors on social media, took advantage of the possibility of distributing “helicopter money”. Many cash-strapped individuals exchange their checks for popular stocks on Reddit wallstreetbets, among others, whose ratings are sometimes disconnected from reality.
For example, Gamestop’s share of sick US PC games rose to high levels again last week, with a market value of nearly $ 20 billion. The share has risen 600 percent since mid-February.
Asia
Sentiment in Asia has been quiet this morning, with most major markets trading in a range of a few tenths of a percent from Friday’s close. Only the Shanghai composite is misplaced with a loss of more than 1 per cent.
Chinese industrial production rose 35.1 percent year on year in January and February. Retail sales increased by 33.8%. However, the first two months of 2020 saw significant declines.
In Tokyo, online retail sales of Rakutten, the main sponsor of FC Barcelona, are up by no less than 20 percent. The Japanese concern has raised billions to improve logistics and invest in the Chinese market, among other things. The issued shares have been floated with giants Walmart and Tencent and investors are preparing for close cooperation.
oil
On a weekly basis, the US oil price fell only 0.7 percent to $ 65.61 a barrel last week. “Investors are aware that the rise in oil prices is mainly a result of OPEC + production restrictions and that these measures are temporary,” said Manish Raj, an analyst at Velandera Energy, of price trend.
In Asian trade this morning, the future of US oil won by only 0.7 percent.
The EUR / USD currency pair also settled last week at a closing price of 1.1959 on Friday. This halted the Dollar’s rally in previous trading weeks. At the turn of the year, the currency pair was still trading at 1.2341.
The Fed’s Agenda and Interest Rate Decision
The macroeconomic agenda is filling up lightly today, with the US Empire State Index being the primary target. However, investors are already looking forward to the Federal Reserve’s rate decision on Wednesday. Equity investors in particular are hoping for signs that the Fed is looking to curb inflation, just as the European Central Bank did last week by ramping up the pace of bond purchases.
However, the outlook is not high, after the rise in US consumer prices in February was better than expected. Additionally, the Fed has indicated on several occasions that it will tolerate rising inflation temporarily.
Company news
InPost, the Polish-listed Damrak company since the end of January, wants to acquire French Mondial Relay for 565 million euros. At the same time as the acquisition, InPost also reported numbers for 2020. Last year, 310 million packages were delivered and sales volume increased 104 percent. Operating EBITDA increased by 184 percent. The margin was 39.3 percent.
German investment bank Berenberg raised Alfen’s target price from 52.00 to 75.00 euros, keeping Houden’s advice.
Close positions Wall Street
The Dow Jones index closed 0.9 percent higher on Friday at 32,778.64 points. The S&P 500 also managed to rise 0.1 percent and thus also reached a new high of 3,943.34 points, while the Nasdaq index lost 0.6 percent at a close of 13,319.86 points.
ABM Financial News; [email protected]; Revised text: +31 (0) 20 26 28999.
