Publication date: October 10, 2024
Price movement AEX Index
It is Thursday, Oct. 10, and the AEX is at 912 in the afternoon. That is 2 points (0.2%) higher than last week's reading. Above is the chart of the AEX as of January 1, 2024. You can see the most likely scenario as we have been reporting it as plotted for several weeks.
The AEX was awaiting the important Consumer Price Index in the US until this afternoon. For the first half of the week, the index hovered between 905 and 916. The CPI has been generally higher than expected, causing inflation to fall less. This may have a dampening effect on stock prices.
What does this mean for sentiment?
Sentiment in stock markets can be characterized as "wait-and-see."
As previously reported, the Fed has already cut interest rates significantly and plans to cut rates further in the coming year. But the pace depends entirely on the data coming out and if they will take the time needed. So this may cause a slowdown. As long as inflation remains under control and the interest rate cut does its job causing the U.S. labor market to pick up, this policy will work out well for Stock markets. But expectations are high. A very slight setback will immediately start to provide additional fuel for the anxious sentiment. It is waiting to see how the macroeconomic figures turn out in the coming period. In addition, one is also waiting to see how the situation in the Middle East develops.
What is the expectation of the course of the AEX Index?
Unchanged. The AEX has been fluctuating sideways around 910-915 for two weeks. The algorithm has a running short signal for the AEX starting at 885. Price target 820 and stop loss at 930.
The most likely scenario is that the AEX has completed its 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 as soon as a slightly disappointing macroeconomic figure comes out or if the situation in the Middle East deteriorates significantly. Then we can expect another moment of panic selling.
The major trend remains up and the indicated decline is a healthy correction and provides perfect opportunities to buy shares for the longer term. AEX price target remains 1025 points,
Look back: read our view of the AEX of October 3, 2024 here
Price movement of the Nasdaq
The Nasdaq futures are currently at 20.415 which is 500 points (2.5%) higher than last week's reading.
The Nasdaq futures corrected very slightly to 19,800 earlier this week but continue to show strength. The CPI is disappointing, causing the stock price to rebound a bit from higher levels this afternoon.
What is the outlook for the Nasdaq's stock price movement?
The Nasdaq has been showing considerable strength for some time. Over the past month, the futures have risen over 10% while the AEX has failed to move beyond a neat 2.5%. It is expected that the Nasdaq future can correct again in the short term to around 19,500 and then find the strength again to continue rising to 21,000.
For the long term, the technical trend is up and the price target is at least 21,900.
The algorithm has given a buy signal for the Nasdaq based on this scenario. The stoploss is at 19,300 and the price target is obviously 21,900.
Important items on the economic agenda for the week of Oct. 14 to Oct. 18:
In the week ahead, we look forward to the ECB's interest rate decision on Thursday, at 2:15 p.m., followed by the press conference at 2:45 p.m. On Thursday at 2:30 p.m., the monthly US retail sales are out. Both events are not insignificant but we do not expect huge volatility as a result of these figures.
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