#Final #call #AEX #drops #hatch #falls #Besi #gold #price #record
The AEX index initially hunted for a new record, but had to abandon that attempt in the afternoon and ultimately suffered a loss of 0.8%. It was mainly the chip and tech funds that pulled the index down. Due to their relatively heavy weight, the AEX performed worse than other European indices.
The AEX was in positive territory for a large part of the day after yesterday’s all-time high, but sentiment abruptly changed in the afternoon. On a weekly basis, a gain of 0.9% still remains. The AMX just kept its feet dry today. The AScX fell by 0.3%.
Two things dominated the mood: the merciless blows to Besi and the better-than-expected American jobs report.
To start with the first: Besi’s share price plummeted by as much as 16.1% today. Rumors that hybrid bonding – in which the company specializes – will not be necessary for the time being, a decline in turnover at TSMC and a reduction in advice from Van Lanschot seemed to be detrimental to the share. In addition, the share may have been the subject of a round of profit-taking. YTD the price has still risen by 9.4% and in the past twelve months the price has doubled. This means that the share is much ahead of the other two chippers
Major capital injection in Chinese chip industry
There was a lot of chip news today anyway. As mentioned, Taiwan Semiconductor Manufacturing Company (TSMC) announced that it recorded lower sales in February. It also became clear that China does not intend to accept US export restrictions on advanced chips. The country now wants to set up an advanced chip sector on its own and with full force, but this will require a lot of money.
Beijing is now passing the hat around to local governments and state-owned enterprises and is trying to raise more than $27 billion for the largest chip investment fund to date, Bloomberg news agency reported this afternoon.
US jobs report better than expected
Today’s most important figure was the US jobs report. A continued robust labor market gives the Federal Reserve room to keep interest rates high for a longer period of time, if that is necessary to get inflation back in line. But a tight labor market can also lead to stricter wage demands and trigger a wage/price spiral.
On balance, the report was quite strong. 275,000 jobs were added in February, the US Bureau of Labor Statistics reported. That is more than the increase of 200K jobs that economists had expected. It was also a lot higher than the 12-month average of 230K.
Job growth for December and January was adjusted significantly downwards. The figure for December fell by 43,000 to 290,000. The figure for January even fell by 124,000 to 229,000.
It was also striking that unemployment unexpectedly rose from 3.7% in January to 3.9%, the highest level in two years. That is a minor setback, because economists expected unemployment to remain stable. The Federal Reserve keeps a close eye on this figure, because it has a dual mandate: in addition to price stability, this is full employment. The latter means that unemployment must remain below 4%. This figure remains just below that.
The development of hourly wages was not too bad. Wages increased by an average of 0.1% monthly and 4.3% annually, compared to +0.3% monthly and +4.4% monthly respectively. This reduces the pressure on inflation somewhat, because in January hourly wages rose much faster than expected: by an average of 0.6% on a monthly basis, while an increase of 0.3% had been expected.
Interest rate cuts in June seem to be on the cards
The big question is what this means for interest rates. An interest rate cut in June now seems the most realistic scenario. According to CME Group’s so-called FedWatch tool, that chance is currently priced at 78.4%. That was still 63% last week. The chance that interest rates can already be lowered on March 20 is nil: 3%. The chance that it will be May 1 is also quite small: 29.1%. But June seems to be on the right track.
Gold prices reach a new record, but long-term interest rates fall
The gold price, which already had the wind in its sails, is doing well on the jobs report: a new record was set. The prospect of lower interest rates makes gold – on which you receive no interest – more attractive as an alternative to savings or bonds. In addition, the disappointing economic growth in China and Europe may play a role.
? SPOT GOLD EXTENDS GAINS, HITS RECORD AT $2182.99 AFTER USA JOBS DATA
— *Walter Bloomberg (@DeItaone) March 8, 2024
An impending interest rate cut is less good news for US government bonds. The ten-year interest rate is falling and is back to the level of a month ago, more about that later.
?US TREASURY YIELDS TURN LOWER, 10-YEAR YIELDS FALL TO 4.044%, LOWEST SINCE FEBRUARY 2
— *Walter Bloomberg (@DeItaone) March 8, 2024
European interest rates are virtually at a standstill today. The Dutch ten-year interest rate is 2.53%, the German rate is 2.26%, the French 2.72% and the Italian 3.57%.
Bitcoin door $70.000
Bitcoin is still doing very well. The currency appears to have slowly become fashionable since the launch of spot bitcoin ETFs in the US in January. Last week, $2.2 billion of fresh money flowed into the ten largest funds, with the lion’s share ending up at BlackRock’s iShares Bitcoin Trust.
Also the approaching one halving is considered a price trigger. This means that the reward for bitcoin miners will then be halved: for each block on the chain they will receive 50% fewer bitcoins. It is not yet known when exactly this halving will take place, but it is expected to happen around April or May. In the past three cycles, the bitcoin price rose sharply, both in the year before and in the year after the halving.
Furthermore, the prospect of interest rate cuts could give Bitcoin a boost. Just like gold, Bitcoin does not earn any interest.
Wall Street is divided
Wall Street initially started the last trading day of the week with a slightly positive mood after the publication of the jobs report, which contained two windfalls: stronger than expected job growth and declining wage increases. But after a few hours of trading, the S&P 500 and the Nasdaq still started to decline. They set records on Thursday evening.
The figures of DocuSign (a software company specialized in electronic signatures) were well received: the share price rose 3.6%. Retailer Costco (-6.6%), on the other hand, could not get their act together. Profits were higher than expected, but sales disappointed.
The figures that chip producer Broadcom published on Thursday after hours were also not met with an enthusiastic reception: the price is 5.2% lower. This probably has to do with a disappointing outlook. We also see a modest correction of 2.5% among its peers Nvidia. Supermarket group Hookswhich saw its share price rise by double digits on Thursday after the figures presentation, has to take a step back today.
The broad market
- The AEX ended 0.7% lower. This means we are doing worse than the surrounding stock exchanges. The Bel20 (+0.4%) and CAC40 (+0.1%) even managed to squeeze out a small profit. The DAX40 did fall (-0.2%), but less than ours.
- The CBOE VIX index (volatility) drops slightly to 14.08.
- Wall Street rates as follows: Dow Jones +0.1%, S&P500 -0.2% and Nasdaq -0.5%
- The euro takes a step back and is trading at 1.0943 dollars.
- As mentioned, gold is in demand: up 1.5% at $2,191.75 per troy ounce.
- Bitcoin is up 1.3% at $68,074.26. YTD there is a plus of no less than 60% on the plates.
- Oil prices are having an off day. Brent’s price is 0.8% lower at $82.11. WTI is 1% lower at $78.08.
Further on the Damrak
CTP continues to rise nicely, but Besi gets a big hit.
- In addition to Besi, industry colleagues also went ASMI (-3.8%) and AEX heavyweight ASML (-2.7%) down. ASML informed ABMfn that it will pay attention to costs this year, as the company will not grow until 2025.
- The poison cup Vivorion (-14.8%) is still not empty. The stock went into freefall this week after research into the candidate drug against Alzheimer’s turned out disappointing. It has now become a money fund.
- CTP The day after presenting the figures, the company once again did good business in the AMX, with a plus of 4.4%. Yesterday an additional 1.9% was added.
- The interest-sensitive real estate sector certainly seems to benefit from the prospect of interest rate cuts. Also Eurocommercial Properties (+1,8%), WDP (+1.5%) in NSI (+1.8%) saw their stock price rebound. Only Vastned (-0.7%) took a step back.
- Lucas Bols (-5.6%) is clearly on its farewell tour, now that the share will first leave the AScX and then the stock exchange, due to the takeover by Nolet.
- TKH received a price target reduction from Berenberg and ended 2.2% lower.
Biggest risers and fallers last week
Finally, the biggest risers and fallers of last week. ING (+6%), IMCD (+5.6%) and ASML (+3.3%) lead the AEX. After today’s loss, Besi is trailing behind, with a loss of 11.3%, followed by Prosus (-3.4%) and UMG (-2.9%).
In the Midcap, CTP (+5.8%) also leads on a weekly basis, followed by Signify (+4.1%) and Fugro (+3.2%). Just Eat Takeaway (-11.7%) is by far the biggest decliner, followed by Basic Fit (-8.1%) and Air France-KLM (-5%).
Advice
Parts removed from Van Lanschot Kempen purchase list:
- Galapagos: to €34.71 from €36.00 and hold – Morgan Stanley
- TKH: to €50.00 from €54, but advice continues to buy – Berenberg
- BE Semiconductor Industries: advice down from buy to hold – Van Lanschot Kempen
IEX BeleggersPodcast: Vivoryon, ASML, three Dutch insurers & bitcoin
The price implosion of Vivoryon, Apple’s lagging stock market performance, the impending departure of ASML from the Netherlands, the ECB’s interest rate decision, the bitcoin rally… There is more than enough discussion material in the podcast, which, like every week, is expertly hosted by colleague Kim Bergsma.
Today Pieter Kort (head of content at IEX) receives Martin Crum (analyst IEX Investor Desk) and Pim Bertens (producer of TV program Bulls & Bears). If you want to know whether you should definitely write off Vivoryon, whether Corbion can deliver on its great promises and whether the popularity of insurance shares is justified, then the IEX Podcast is definitely worth listening to.
IEX BeleggersPodcast: Vivoryon, ASML and three Dutch insurers and of course bitcoin – IEXnl via @IEXnl
— IEX.nl (@IEXnl) March 8, 2024
Viewing tip: Bulls & Bears on SBS6 with IEX analyst Hildo Laman
Hildo Laman, head of the IEX Investor Desk, joined the TV program Bulls & Bears this week to update you on the latest developments at the stock exchange and the coming stock market week. A variety of topics were discussed, including the impressive rise of bitcoin, Vivoryon, Genmab and Fugro.
You can watch the broadcast this weekend at:
- Saturday at 12:00 noon
- Sunday at 10:00 am
Agenda: can Japan narrowly avoid recession?
We will also notice next week that the earnings season has now really passed its peak. The final Japanese GDP for the fourth quarter is scheduled for the night from Sunday to Monday. The preliminary figures were worse than expected: GDP fell by 0.1% quarterly and 0.4% annually. There was also a decline in the third quarter (-0.8% on a quarterly basis and -3.3% on an annual basis), which would indicate a technical recession.
However, economists expect that a recession has been averted in the nick of time. Economists polled by the news agency expect growth in Q4 of 1.1% on an annual basis and 0.3% on a quarterly basis.
Oracle will open the books for the third quarter of its fiscal year on Monday after Wall Street closes.
Coming stock market week: US inflation, Basic-Fit, Pharming and Sif
In the days that follow, several more companies will come forward with figures, including: Zalando, which will probably soon be exchanged for Lufthansa in the DAX (Wednesday), Basic-Fit, Pharming, Adobe, Groupon (Thursday) and Sif (Friday).
The American (and also Dutch) inflation on Tuesday may stir up some controversy. Another inflation indicator will follow on Thursday: producer prices. Retail sales could also potentially move the markets. And then we have pretty much had the most important news for the next trade fair week.
IEX Investor Day: register and meet CEOs of Unilever and TKH
Friday, June 28 is the day: the IEX Investor Day 2024 in the Spant theater in Bussum! A day on which you, as a reader of IEX, can gain plenty of knowledge and inspiration for interesting investment opportunities.
It promises to be a beautiful and inspiring day! We are still working on further shaping the program, but the line-up already looks promising. None other than Hein Schumacher, CEO van Unilever, makes its appearance. Also Alexander van der LofCEO of TKH will take the stage. Various investment experts, including Hildo Laman, head of the IEX Investor Desk, will provide you with a lot of background information and buying tips, so you can make better investment decisions.
The presentation is in the hands of journalist Jort Kelder.
Ticket sales started this week. Want to know more about the IEX Investor Day? View the website now.
That’s it for now. I wish you a pleasant weekend!
