Is the AEX Index Poised for a Breakout?

Outlook: AEX index is assigned short-term B1 & long-term Baa2 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised¹ :
Dominant Strategy :
Time series to forecast n: for Weeks²
ML Model Testing : Modular Neural Network (News Feed Sentiment Analysis)
Hypothesis Testing : Paired T-Test
Surveillance : Major exchange and OTC

¹The accuracy of the model is being monitored on a regular basis.(15-minute period)

²Time series is updated based on short-term trends.

Key Points

The AEX index is predicted to experience moderate growth in the short term, driven by anticipated positive corporate earnings and a stable economic outlook within the Eurozone. However, this forecast carries risks. Global economic slowdown poses a significant downside risk, potentially impacting export-oriented Dutch companies and dampening investor sentiment. Further, inflationary pressures and potential interest rate hikes by the European Central Bank could negatively impact corporate profitability and valuations. Geopolitical uncertainties, including the ongoing conflict in Eastern Europe and potential trade disruptions, add further downside risks to the AEX's trajectory. Finally, unforeseen events, such as a resurgence of COVID-19 or other pandemics, could trigger market volatility and negatively impact the index.

About AEX Index

The AEX index, officially known as the Amsterdam Exchange index, is a stock market index composed of Dutch companies that trade on Euronext Amsterdam, formerly known as the Amsterdam Stock Exchange. It is a market capitalization-weighted index, meaning the influence of each company on the index's value is proportional to its market capitalization. The AEX represents the top segment of the Dutch equity market and provides a benchmark indicator of the overall performance of the largest and most liquid Dutch companies. The index is reviewed quarterly, with changes in constituents based on market capitalization and free-float adjusted shares. This regular review ensures the index continues to accurately reflect the performance of leading Dutch companies.

The AEX index is widely followed by investors, both domestically and internationally, as a key indicator of the health and performance of the Dutch economy. It serves as an underlying for various financial instruments, including exchange-traded funds (ETFs), derivatives, and other investment products, allowing investors to gain exposure to the Dutch market. Its long history, dating back to 1983, provides a valuable dataset for long-term market analysis. The transparent methodology used for calculating and managing the index ensures its credibility and reliability as a benchmark.

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ML Model Testing

F(Paired T-Test)^6,7= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Modular Neural Network (News Feed Sentiment Analysis))^3,4,5 X S(n):→ 4 Weeks $R=\left(\begin{array}{ccc}1& 0& 0\\ 0& 1& 0\\ 0& 0& 1\end{array}\right)$

n:Time series to forecast

p:Price signals of AEX index

j:Nash equilibria (Neural Network)

k:Dominated move of AEX index holders

a:Best response for AEX target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do KappaSignal algorithms actually work?

AEX Index Forecast Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

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Rating	Short-Term	Long-Term Senior
Outlook	B1	Baa2
Income Statement	B3	Baa2
Balance Sheet	C	B2
Leverage Ratios	Baa2	B1
Cash Flow	Caa2	Baa2
Rates of Return and Profitability	Baa2	Baa2

*An aggregate rating for an index summarizes the overall sentiment towards the companies it includes. This rating is calculated by considering individual ratings assigned to each stock within the index. By taking an average of these ratings, weighted by each stock's importance in the index, a single score is generated. This aggregate rating offers a simplified view of how the index's performance is generally perceived.
How does neural network examine financial reports and understand financial state of the company?

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