Bitcoin and gold are currently through the roof, while the AEX rate is taking it a bit easier after the first interest rate cut by the American central bank. Today, the Dutch stock market index comes in at 904.87 points for a minimal increase of 0.14%.
AEX cautiously settles above 900 points
Now the AEX has been doing a lot worse in the past month (and certainly in August). Slowly but surely the Amsterdam stock market index seems to be recovering a bit from the misery we saw in August and early September.
On August 5, the price plummeted to 840 points, while in mid-July there was still an AEX price of around 950 points on the boards. That was also the absolute all-time high of the AEX for the time being.
For now, the market is mainly looking at America and to a lesser extent at China, where things are also starting to bubble. In America, everything is now of course about the Federal Reserve, the American central bank and the health of the economy, while interest rates are starting to fall.
On Wednesday, the Federal Reserve lowered interest rates by 0.50%, and more interest rate cuts are scheduled for November and December. Will the US economy remain strong while interest rates fall? In theory, that would be bullish for the AEX.
China in AEX
Then it’s time for a bit of China. Today, the Chinese central bank announced that they will stimulate the ailing economy again.
This time, among other things, by lowering the reserve requirements for banks in China by 0.50%. This allows banks to lend more money for the same amount of capital they possess. In theory, this should provide a stimulus for the troubled Chinese economy.
But of course that also creates more capital in the financial system, which is bullish for assets with a natural scarcity. Although stocks do not immediately come to mind as assets with a natural scarcity, investors naturally own them.
After all, a company does not simply issue new shares. In that respect, shares are also somewhat like a store of value. For example, many investors blindly invest an x amount of capital in the AEX every month.
You could say that they use the AEX as their piggy bank in this way. In this way, the AEX not only functions as a generator of dividends (corporate profits), but also as a store of value.
Source: https://newsbit.nl/aex-koers-oogt-stabiel-boven-de-900-punten/
