27 March 2018Reading time: 3 minutes

Insurance company ASR and lighting company Philips Lightning were both promoted on March 19 from the AMX to the AEX. They switch with dredger Boskalis and maritime service provider SBM Offshore, who will go through the same process in opposite direction. Because of the revaluation, funds and investors who are passively following the index may adjust their positions. In this case they could sell their shares of Boskalis and SBM Offshore and replace those with shares of ASR and Philips Lightning. Investors who may want to buy shares of Philips Lightning, should be aware that the company wants to change its name to Signify on 15 May.

By the end of January the AEX lost its accumulated profit in a short time. Just like other stock markets worldwide, the AEX was pressurized by the grown fear of an increasing inflation. Among other things, the figures on the American labour market, which were presented in January, fuelled this sentiment. Despite the fact that these figures were beneficial for the American economy, they also showed that American hourly wages are increasing. Because of this the inflation could grow and the Federal Reserve might decide to increase their rates.

The following American job report that was presented early March, has calmed down the investors a little. In February the job growth increased but because many unemployed people reported themselves on the market, this was not accompanied by additional wage growth. The average American hourly wage increased 0.3% in January, but this was only 0.2% in February. On an annual basis the hourly wage increased with 2.6% in February, which is 0.2 percentage points less than analysts surveyed by Bloomberg counted on.

The Federal Reserve focuses on an annual wage growth of 3.5%, which reflects a inflation of 2% and a productivity growth of 1.5%. Because the current wage growth is still considerably below this, the American Central Bank will probably be less inclined to increase their rates at short notice. However, analysts expect that the Federal Reserve will increase their rates several times this year. It remains to be seen or and if so, when they will take place and how big these rate hikes will be.

The same situation can be seen in Europe. Throughout February the inflation within the Eurozone is 1.1%, which is lower than the 1.2% which analyst on average counted on earlier and it is also lower than the 2% that the European Central Bank is striving for. This could support the vision of the European Central Bank to prolong the current purchasing program. Future developments are subjected to several political, industrial and sector specific, as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

Vontobel products on AEX are tradable at DEGIRO..

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04/08/2021 01:39:07