Global Markets React to ECB and Fed Interest Rate Moves: AEX Expected to Open Higher
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Global Markets React to ECB and Fed Interest Rate Moves: AEX Expected to Open Higher

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The ECB and Fed opened the door further to an interest rate turn, Wall Street closed mainly higher, Asia also performed very well and the futures on the Damrak point to a higher opening for our main index.

The AEX is expected to open 0.2% higher.

ECB hints at cut in June…

The news yesterday was mainly dominated by the ECB’s interest rate decision. Not much changed. Just say: nothing. However, in the explanation, the ECB did open the door to the first interest rate cut. “We will know a little more in April, but a lot more in June,” Lagarde said, referring to the macroeconomic data that are still coming in until then.

The minutes of the meeting of January 25, when the pause button was also pressed, show that the ECB still feels comfortable with the current high rate for the time being and is in little hurry to lower interest rates. The risk of reducing too early was still considered greater than the risk of delaying. Statements from ECB officials point in the same direction.

The ECB is guided by data and is looking for convincing evidence that inflation is truly on the decline. That does not seem to be the case yet. Much depends on the development of wages. Too strong a wage increase could trigger a wage-price spiral and reignite inflation. More will become clear about wage developments in Q1 in May.

…and the Fed follows suit

The American central bank umbrella organization Federal Reserve is ‘not far from the confidence needed’ to lower interest rates. Fed Chairman Jerome Powell told the US Senate Banking Committee. The Fed boss seems to be hinting that interest rates in the United States could be lowered within a few months.

Powell is in Congress to explain the Fed’s monetary policy. “We are still waiting to gain more confidence that inflation will move sustainably towards the 2% target. When we have that confidence, and we are not far from that, then it will be appropriate to scale back the level of restraint,” he said. Powell.

The US Jobs Report

Also worth keeping an eye on. The report will be published at 2:30 PM and growth of approximately 200K jobs is expected. That is significant, but less than the increase (+353KK) in January. Unemployment is expected to remain stable at 3.7% and wage growth is expected to weaken somewhat to 0.3% on a monthly basis and 4.4% on an annual basis.

The Fed will pay particular attention to unemployment, because it has a dual mandate: in addition to price stability, this is full employment. The latter means that unemployment must remain below 4%, and the figure remains neatly below that. The downside of a tight labor market is that it can lead to stricter wage demands. In that respect, the development of hourly wages is also interesting, which can also be found in the jobs report.

This caused some concern last month. Hourly wages had risen by an average of 0.6% on a monthly basis, while an increase of 0.3% had been expected. Economists now expect wage pressures to decrease. Would also be nice with a view to future interest rate cuts.

In addition to the US jobs report, there will be more figures worth watching, such as the final EU and Eurozone GDP for the fourth quarter. From preliminary figures there is Eurostat it appears that the economy is in the doldrums. EU GDP rose by just 0.1% and the eurozone’s GDP slowed.

Downgrades send Mithra deeply into the red

Today Mithra is the only fund that reports figures. Not exactly a good time for Mithra to be under a magnifying glass, with the price implosion of sector colleague Vivoryon in mind. On Monday, Vivoryon announced that it had made no progress with its Alzheimer’s drug. “The clinical research into its drug varoglumastat showed no improvement on the cognitive level and therefore Vivoryon did not achieve its primary goal,” an explanation showed. What happened to the stock? That fell by 90% (from €8.40 to €0.62).

A further update will follow with the annual figures in April. Whether this still matters is a concern for later. Why? Because it’s not just investors who got rid of their shares during the panic selling. Because one of the top directors has also sold his shares. This concerns Chief Business Officer Michael Schaeffer, who has sold his entire interest of 3,867 shares, according to a notification to the Netherlands Authority for the Financial Markets (AFM). Look for the differences.

Another fun fact: Mithra is a Belgian, listed pharmaceutical company with a focus on health products for women. Whether it is a coincidence that the company is releasing figures today remains to be seen. Today is International Women’s Day. This is now a recognized holiday that takes place every year on March 8.

Now to the figures and they speak volumes. Revenues fell significantly to €40.2 million, a significant decline compared to the previous year, mainly due to lower licensing revenues and a delay in the filing of key documents for the US market. This translates to an alarming net loss of €173.5 million, down sharply from €59.6 million in 2022, mainly due to non-cash write-downs on assets such as Mithra CDMO and ZORELINE®.

Despite these worrying figures, there is a glimmer of hope in the increase in product sales, up 19.3% to €18.7 million. Sales of ESTELLE® in particular stood out, with a turnover of €10.4 million, which exceeded expectations. Despite the financial challenges, positive developments such as promising preclinical data and safety results from clinical trials remain a ray of hope.

Wall Street

The US stock markets closed higher on Thursday, pushing the S&P 500 and Nasdaq back to record highs. This is partly because hopes for declining inflation are increasing and because of the significant price gains in the technology sector.

And as is known, Jerome Powell explained the policy yesterday to the Senate Committee on Banking, Housing and Urban Affairs. He talked, among other things, about the need for new rules to tackle crises such as the 2023 bank run. He also said he was surprised by the two events when interest rates rose.

The first was the effect of failing institutions such as Silicon Valley Bank. “We were aware of it, but we probably didn’t appreciate it enough,” he said. He added that the other surprise came from the rapid decline in inflation. “It doesn’t match the historical data, but it’s very positive,” he said.

Below is a summary of the final positions.

  • S&P 500: +1,0%
  • Dow Jones: +0,3%
  • Nasdaq: +1.5%

Broadcom reported figures after the close. The manufacturer of semiconductors for network cards and various peripherals was in any case able to exceed sales expectations. Earnings per share are also higher than expected. However, Broadcom saw its profits decline and did not provide guidance for the current quarter, but did reiterate previously expected targets for the upcoming fiscal year.

Asia

On the stock exchanges in the Far East, investors are in buying mode. Asian investors thus took over from Wall Street, where record levels were recorded on Thursday evening for the S&P 500 and the Nasdaq tech exchange, which rose one and a half percent mainly thanks to the ongoing AI hype.

TSMC also announced that it had recorded less turnover in February. In February, the Taiwanese semiconductor manufacturer recorded 15.8% less turnover than in January. On an annual basis, turnover increased by more than 10% in February. So pay close attention to the chippers after the news surrounding Broadcom and now TSMC.

Here are the rankings of the most important indices – clocked at 8:00 am:

  • Nikkei 225: +0,1%
  • Hang Seng (Hongkong): +1,5%
  • CSI 300: +0,2%
  • Kospi: +1.1%

The indicators

  • The AEX is expected to open higher.
  • European futures point to a mostly higher open.
  • Asia finished unanimously in the green.
  • The CBOE VIX index (volatility) rose slightly to 14.44.
  • The euro rises slightly to $1.0947.
  • The Dutch ten-year interest rate is 2.61%.
  • The gold price rises by 0.1% to $2,161 per troy ounce.
  • For a barrel of WTI oil you now pay $79.51.
  • Bitcoin continues to roar and is trading at $66,947.

News

The most important news from ABM Financial News:

  • 08:10 German producer prices continue to fall
  • 08:03 DSM-Firmenich completes sale of Chinese vitamin factory
  • 08:03 AEX expects a slightly higher start in the run-up to US jobs report
  • 07:41 New CFO for NSI
  • 07:22 Less turnover for TSMC
  • 07:20 Asian stock markets convincingly in green
  • 07:04 State of the Union: Biden reflects on democracy, society and Gaza
  • 06:55 European stock markets are expected to open higher
  • 06:46 Stock market agenda: macroeconomic
  • 06:45 Stock market agenda: foreign funds
  • 06:44 Exhibition agenda: Dutch companies
  • March 07 Stock market update: AEX on Wall Street
  • Mar 07 Broadcom sees turnover increase
  • Mar 07 S&P 500 and Nasdaq rise to new records
  • Mar 07 Oil prices close slightly lower
  • Mar 07 Wall Street is heading for a higher close again
  • 07 Mar Several records have been set on European stock exchanges
  • Mar 07 FL Entertainment will grow strongly in 2023
  • Mar 07 DGB expands project pipeline

Shorts

The AFM reports this shorts:

Agenda

  • 00:00: Mithra, fourth quarter figures
  • 06:30: NL, industrial production January
  • 08:00: Germany, industrial production January
  • 08:00: Germany, January producer prices
  • 11:00 am: EU, economic growth fourth quarter (final)
  • 2:30 PM: US, job growth and unemployment in February

And then this

New CFO for NSI

Huawei uses American technology for breakthrough

Take a moment to catch your breath…

About ‘Operation Beethoven’

Have a nice weekend!

Have fun and good luck today.


2024-03-08 07:17:59
#AEX #remains #hunt #records #runup #jobs #report #IEX.nl

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