The AEX price opens flat today and is at a modest increase of 0.10%. Five days ago, the Amsterdam stock market index managed to set an all-time high on the boards, but the momentum now seems to be waning. Next Thursday could well be crucial for the future of the AEX in 2024.
Crucial days for the AEX
Although the AEX is an Amsterdam stock market index, the American economy and the policy of the Federal Reserve continue to play an important role in the price movements.
This means that next Thursday promises to be a very important day for the AEX, as it is time for the United States Consumer Price Index (CPI) again.
That needs to come down so the Federal Reserve can start cutting rates. After a false start to 2024, with inflation suddenly rising in Q1, we are finally seeing progress on this front.
If confirmation of this comes on Thursday, the Federal Reserve could make its first rate cut as early as September, and we could end 2024 with 2 (or maybe even 3) rate cuts.
Why is this so important?
Objectively, a 0.25% rate cut in September should not make a difference. That is also the argument of many economists, who claim that the market gives these kinds of decisions much more weight than they should have.
There is of course some truth in that, but the market also moves based on the prevailing narrative.
In recent months, that narrative has been one of pessimism about inflation and Fed rate cuts. Now we are seeing that story turn around, and this coming Thursday could contribute to that.
If we see a low inflation score, this could provide the optimism needed to make the second half of 2024 very bullish for the AEX and the rest of the financial market.
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Source: https://newsbit.nl/aex-koers-opent-vlak-op-cruciaal-moment/
