The AEX is clearly in the plus on Wednesday afternoon. Around 950 points, the index is lifted by strong gains for ASMI, ASML and BESI, while banks and insurers lose ground. Investors are digesting strong European services data and looking ahead to US jobs figures and the Federal Reserve’s interest rate decision.
ASMI, ASML and BESI are driving the AEX
The Amsterdam AEX climbed towards 948 points mid-afternoon, a gain of more than a third of a percent. The increase is almost entirely attributable to the chip sector.
ASMI stands out with a gain of almost four percent. Investors are responding to a range of new buying advice; Analysts see the chip machine manufacturer as a clear recovery candidate now that demand for advanced chips is picking up. ASML also posted a strong plus of almost two percent. The group is benefiting from renewed interest in semiconductors following the powerful AI rally on Wall Street.
BESI joins the advance and gains more than three percent. The three chippers thus confirm their position as the driving force of the AEX. Earlier in the day, chip makers in the United States were already in good shape, helped by the news that Marvell is acquiring sector peer Celestial AI to strengthen its position in data centers and artificial intelligence.
Adyen is also making its contribution with an increase of more than one and a half percent. On the positive side are also Shell, Randstad and Wolters Kluwer, all of which contribute with small pluses to the green image on Beursplein 5.
Financials and defensive names under pressure
On the other side of the price board we see a completely different story. Insurers and banks form the tail of the AEX. NN Group loses more than one and a half percent, followed by Ahold Delhaize, ASR Nederland, ABN AMRO, Aegon and ING with losses around or just under one percent.
Investors are taking profits after the strong ride that financials have had in recent months. The upcoming Fed interest rate meeting plays a role in this. Now that the market is almost certainly counting on a new interest rate cut, the pressure on the profit margins of banks and insurers is increasing slightly.
More defensive funds are also taking it slower. Unilever is moving slightly downwards in the run-up to the IPO of the ice cream division, which is scheduled for early next week. Philips and real estate funds such as WDP and InPost are also losing some ground.
Strong European services sector, crypto market rebounds
In the eurozone, meanwhile, there is good news from the real economy. The purchasing managers’ index for the services sector rose to its highest level in thirty months in November. The composite figure for industry and services is therefore creeping further above the growth limit. Industry is lagging behind and shrinking slightly, but the rebounding services sector gives investors confidence that Europe can avoid a recession in the coming months.
The picture is mixed in the commodity and currency markets. Oil prices are rising slightly and copper is clearly gaining ground, indicating confidence in the global economy. Gold, on the other hand, remains virtually silent. The euro is gaining some ground against the dollar, partly because the market is counting on a less aggressive Fed.
Things remain uneasy for crypto investors. Bitcoin was still around $93,000 earlier today, but tumbled back towards $92,000 in a short time. During the sudden afternoon dip, the currency even briefly dropped to just above $91,700, before fluctuating around $92,200 again. That sharp intraday move shows that volatility is still high.
Crossing the Borders: Wall Street, Jobs and the Fed
Outside the Netherlands, everything revolves around the United States. The ADP report on the US labor market showed an unexpected decline in private sector jobs for November. Instead of growth, tens of thousands of jobs disappeared, especially at smaller companies. This points to a cooling labor market.
Paradoxically, investors welcome this. A weaker job market increases the chance that the Fed will cut rates again next week. The market is now almost fully pricing in a reduction of a quarter of a percentage point. Investors are also looking ahead to the possible succession of Fed Chairman Jerome Powell; economist Kevin Hassett is seen as the favorite by markets, which reinforces expectations of a flexible interest rate policy.
Futures on Wall Street are pointing to a slightly higher open this afternoon, with expected gains of several tenths of a percent for Dow Jones, S&P 500 and Nasdaq. Chip company Marvell is shooting up in pre-market trading after higher profit expectations and the acquisition of Celestial AI. At the same time, the technology sector is abuzz with rumors about a possible IPO of AI player Anthropic, a direct rival of ChatGPT and Google Gemini.
With strong chip funds on the Damrak, a rebounding service sector in Europe and increasing speculation about a dovish Fed, the AEX seems to be benefiting from global optimism for the time being, although the balance sheet remains fragile as long as economic figures remain erratic.
Source: https://newsbit.nl/aex-hoger-asmi-asml-en-besi-trekken-de-kar-banken-dalen/
