AEX struggles towards 2026
Between 12 and 19 December, the AEX index showed little movement on balance, with the index experiencing resistance at the 940-point level. At the time of writing (Friday morning), the Amsterdam benchmark index stands at 939 points.
Last Wednesday, the Federal Reserve (the US central bank) lowered its policy rate by 25 basis points to a range of 3.50%-3.75%. We believe this pattern will continue in 2026, especially if inflation remains under control and the labour market weakens. Meanwhile, the European Central Bank (ECB) is likely to leave its policy rate unchanged for the time being, unless the economy remains weak or Europe's competitiveness is jeopardised by an unfavourable euro/dollar exchange rate.
We therefore expect little movement in short-term interest rates in Europe for the time being. Long-term interest rates are likely to rise slightly. Many European governments need to tap the capital market to realise their investment plans (large-scale spending on defence and infrastructure). This means that bond buyers will want higher interest rates for government bonds due to increased supply. This could also have consequences for home buyers, who often finance their homes with long-term mortgages. If long-term interest rates rise, this could mean higher housing costs.
Noteworthy company news
ASML shares took a significant step back on Wednesday. This was due to the news that China may have succeeded in building a working prototype of a so-called EUV machine. Until now, ASML was the only company that could manufacture these machines. Investors reacted with shock to the news. ASML shares fell by 4% on Wednesday.
Philips shares fell slightly on Monday after the company announced it was acquiring the American healthcare company SpectraWAVE for an undisclosed amount. With the acquisition of SpectraWAVE, Philips is embarking on its first takeover since the debacle surrounding its defective apnoea machines.
Stablecoin company Tether has attempted to acquire Italian football club Juventus from the Agnelli family. Last weekend, it became clear that the takeover bid had been rejected. Nevertheless, Tether's attempt to invest in a football club remains remarkable. Stablecoin issuers often purchase dollars, euros or government bonds to cover their coins.
The second-largest stock exchange in the US, the Nasdaq, plans to enable trading 23 hours a day. It is a way to bring American stocks to the attention of a global audience. They will then be able to trade at virtually any time and from any location.
Outlook
Geopolitical developments and AI are likely to continue to dominate the financial headlines in the coming period. In addition, investors will be keeping a close eye on the interest rate policies of central banks. As long as inflation remains under control, share valuations could rise further. For now, happy holidays and see you in 2026!