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Current AEX Index
It's Friday, Sept. 20, and the AEX is at 903 in the morning session. That is 6 points (0.65%) higher than last week's reading. Here below is the chart of the AEX over the past three months. You can see the most likely scenario as we have been reporting for several weeks.
The AEX continued to fluctuate around 900 until Wednesday evening. This was in anticipation of the US interest rate decision and commentary from the Fed. The cut of 50 basis points (0.5%) and the announcement that the FED is aiming for a further cut over the next two years of another 200 basis points, was taken slightly positively by the markets.
The major trend is up and the indicated decline is a healthy correction and provides perfect opportunities to buy stocks for the longer term. AEX price target remains 1025 points.
What does this mean for sentiment?
The sentiment in equity markets can be characterized as "hopeful." As long as inflation remains under control and the interest rate cut does its job causing the U.S. labor market to pick up, these policies will work out well for equity markets. Hence "hopeful" because there is certainly hope shining but a very slight setback will immediately start to cause anxiety. The Fed has made a substantial move and should start working out as expected. There is hope for a lot of positive news.
What is the expectation for the course of the AEX Index?
The algorithm has a running short signal for the AEX from 885. Price target 820. The stoploss is adjusted over time but for the moment it stands at 930. The most likely scenario remains that the AEX has completed the recovery in the 920-925 zone. Then the larger correction will be completed by a fall of the AEX to the 820 level. This fall may be triggered the moment the high expectations of the macroeconomic figures slightly disappoint.
Backward look: read our view of the AEX of September 12, 2024
The price movement of the Nasdaq
The Nasdaq futures are currently at 20.050 which is 750 points (3.9%) higher than last week's position.
The Nasdaq futures initially kept quiet but after the US interest rate cut, the Nasdaq rose solidly to the previous high of August 22 around the 20,000 level. The Nasdaq has traditionally reacted strongly to the interest rate cut with its Tech funds.
What is the expectation of the Nasdaq's stock price movement?
For the short term, the most likely scenario is a rise to around 21,000 before correcting to the 20,000 mark. However, this forecast is surrounded by many uncertainties and variables. We report it but also explicitly state that our algorithm is not yet issuing a buy signal due to the lack of important confirmation.
Well, the algorithm has moved away from the correction to 16,500 as the most likely option. The Nasdaq is stronger in its upward trend than the AEX and the Dow Jones. The buy position is on the watchlist.
For the longer term, the price target stands like a house; 22,900 points.
Below is the chart of the Nasdaq100 -future since January 1, 2024 with the most likely scenario plotted.
Important items on the economic calendar for the week of Sept. 23 through Sept. 27:
In the coming period, everything revolves around inflation and the labor market in the US. Next week we look forward to the weekly unemployment figures on Thursday at 2:30 p.m. but especially the inflation figures on Friday at 2:30 p.m. These are the monthly and annual figures relating to Core Personal Consumption Expenditures in the U.S.
Further, both the Fed and ECB presidents will give a speech on Thursday afternoon at 3:30 p.m.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. Therefore, they are for educational purposes only.
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