Final call: AEX squeezes out a record, despite the chippers’ off day

It’s a bit shaky, but today the AEX has set a new intraday record and a new highest closing position in the books.

The final score of 879.10 is only 0.08% higher than yesterday’s close, but a record is a record. And all in all it is a great achievement, considering the off day for both Shell and the chippers. The latter in particular have often done the heavy lifting for the Amsterdam index lately.

The gainer of the day is Ebusco (+7%), which has recently ended up in a trial and error pattern. Although on balance this year has still been more trial than error. Today, the entire top 3 consists of recovering small caps, as NXFiltration (+3%), which announced that it has raised €25 million, and Accsys (+5%) are also rising convincingly.

Perhaps the start of a general catch-up of small caps? The price rally on both Wall Street and the European stock exchanges has not been broad-based so far. It is mainly a handful of large caps that are responsible for record levels on the financial markets, mainly from the tech stocks. This makes low-valued small caps increasingly interesting to pick up. This is what Martin Crum wrote about it today:

Chips: US vs. China

In the world of large caps, especially the big tech companies, regulation and geopolitics are becoming an increasingly important factor – from the companies’ point of view, mainly a restraining factor. The US is serious about not letting China play at the highest technological chip level; Today, the Biden administration asked its allies to limit maintenance work on chip machines, to further thwart Chinese ambitions in this area.

Do we know of chip machine companies among American allies? Oh yes, they are listed on the Damrak. And it is no coincidence that they are all dangling at the bottom of the price screen today. Besi (-2.2%) takes the hardest hit, ASML (-0.6%) keeps the damage the most limited. In the meantime, China is not sitting still and has announced that it will phase out computers and servers with chips from Intel and AMD. Supposedly because they are not safe and reliable. Naturally, this is a response to US restrictions and the recent sanctions against Huawei.

“It is not entirely clear how much turnover Intel generates from sales to the Chinese government, but the impact is probably not too bad. If the restrictions expand further, it could hit the group more severely,” says Ivo Breukink in his analysis on IEX:

Option tip: Stoxx Europe 600

Just about those small (and mid) caps: if the smaller shares actually start to catch up, then indices with a broader base will also become more interesting than large cap indices such as the Euro Stoxx 50. Consider, for example, the Stoxx Europe 600, an index of 600 European companies, which is relatively low valued and, unlike the Euro Stoxx 50, also includes companies outside the euro zone (for example British and Swiss).

Hildo Laman’s option tip today focuses entirely on a possible revival of this broad European index:

The broad market

• The AEX is performing worse than other European stock exchanges, thanks to weak Shell & chippers
• Wall Street is taking it easy, Nasdaq slightly lower, S&P 500 at a small plus
• The American 10-year interest rate falls 4 basis points, in Europe there is calm on the interest rate front
• The oil price (Brent) has fallen back below $86 and is consolidating slightly above $85
• Gold is again making a run towards $2,200, bitcoin has dipped below $70K

Risers & fallers

• The top 3 and flop 3 of the Damrak:

• Small caps at the top, the flowers go to Ebusco (+7%)
• In the AEX, Adyen (+2.2%) is the strongest player, supported by a buy recommendation from Sanford C. Bernstein
• Prosus (+1.3%) is in a good position after Tencent held up well against the market in Hong Kong
• UMG (+1.0%) is going into K-pop and that’s going over well
• IMCD (+0.6%) is making an acquisition but is an AEX mid-market company
• Shell (-1.3%) joins the chippers at the bottom of the AEX
• Flow Traders (+2.5%) is actually rising against the volatility
• It is quiet around Allfunds (-2.5%), and there seems to be some speculative takeover air

Advice

Upgrades for Adyen and LVMH, Berenberg upgrades the entire European automotive sector.

• Sanford C. Bernstein & Co increases the hold recommendation for Adyen to buy (price target €1,620)
• Barclays increases the recommendation for LVMH to buy (price target € 937.00)
• Berenberg raises BMW’s price target to €110.00 (hold)
• Berenberg raises Mercedes-Benz’s price target to €86.00 (buy)
• Berenberg raises Volkjswagen AG’s price target to €136.00 (buy)
• Berenberg raises Renault’s price target to €52.00 (buy)
• Berenberg lowers the buy recommendation for Stellantis to hold (price target €29)

agenda

Many stock exchanges are closed on Friday, so it is still a relatively busy Thursday – for these times – with a lot of American macro data in particular.

• 07:00 InPost Q4 figures
• 07:30 Fastned annual figures
• 08:00 Germany retail sales Feb
• 08:00 UK economic growth Q4 (final)
• 09:00 Randstad ex €2.28 dividend
• 09:55 Germany unemployment Mar
• 1:30 PM US aid applications – weekly
• 13:30 US economic growth Q4 final
• 14:45 US Purchasing Managers Index Chicago Mar
• 3:00 PM US upcoming home sales Feb
• 3:00 PM US Consumer Confidence (University of Michigan) Mar

And then this

How rich are rich countries without their richest regions? Painful for the United Kingdom. And: Alkmaar…?

In America, stock fund investors take profits

Wages are moving in the right direction, the ECB sees

ECB members also have time to get excited about other things: “a sharp drop in the quality of the olive oil being served with lunchtime salads in the Eurotower and Japan Center offices in Frankfurt”