Soaring DAX: Shattering Records After Trump's Tariff U-Turn
Stock price of Dax soars following Trump's market downturn
Switching gears, let's take a look at the DAX breaking records, all thanks to Donald Trump's tariff rollbacks!
The DAX surged by 0.7% within the first trading hour to an unprecedented 23,529 points. One month following the slump caused by Trump's tariff announcement, this index smashed the old record of 23,476 points. The opening was only expected to be marginally below the previous record.
Following the trade agreement between the USA and the UK, stock exchanges finished in the green on Thursday. The German leading index ended the day 1% up at 23,353 points. US stock markets also responded positively to the trade agreement but not with overflowing optimism.
Thomas Altmann, portfolio manager at QC Partners, issued a word of caution. He pointed out that the starting point for this deal was advantageous and the negotiations were less of a challenge compared to trade with the USA, where the UK currently maintains a surplus.
Gearing Up: Commerzbank in Focus
In early April, the DAX plummeted to around 18,490 points due to Trump's proposed tariff hikes and China's counterresponses. Since then, the index has made a spectacular comeback with a 27% gain in its recovery phase. Year-to-date, it's up by 18%.
The limelight is on China's economy towards the end of the week. According to customs data, China's exports grew by 8.1% year-over-year in April, while imports decreased by 0.2%. These figures contradict the experts' expectations, predicting a significant drop in trade, particularly due to the ongoing trade conflict with the USA.
Commerzbank's Performance: Profits Soar
Commerzbank's business report grabs the attention among the companies. The German bank, courted by Italian UniCredit, reported a net profit of 834 million euros in the first quarter – a 11.7% increase. Analysts anticipated a decline to 698 million euros. Investors are also keeping an eye on the results of smaller companies such as Krones and Bechtle.
In the US, the annual general meetings of defense company Lockheed Martin and biopharmaceutical firm AbbVie are set to take place.
Krones' shares were highly sought-after in the MDAX, rising by nearly 3%. As the world's largest beverage filling system manufacturer, Krones demonstrates resilience amidst the growing economic uncertainty due to threatened US tariffs.
Sources: ntv.de, chl/DJ/rts/dpa
- DAX
- Donald Trump
- USA
- Tariffs
- Stock prices
Enrichment:
The recovery and record-breaking rise of the DAX can be attributed to multiple factors:
- Eased Trade Tensions:
- The US has shown signs of softening its stance on trade, alleviating concerns about tariffs and their impact on the global economy, and boosting investor confidence, especially in sectors heavily affected by tariffs, such as the automotive industry.[4][5]
- Policy Changes in Germany:
- The formation of a new conservative-led coalition government in Germany has fueled optimism about economic growth. The government's plans to stimulate the economy, boost defense spending, and modernize infrastructure have been welcomed by investors, contributing to the rally in German stocks.[4]
- Potential US-EU Deals and Global Economic Trends:
- Possible agreements or improved relations between the US and EU have contributed to the positive outlook for European markets, including the DAX.[1][4]
- Market Sentiment and Economic Data:
- Despite recent economic data indicating a contraction in Germany's GDP, market sentiment remains upbeat due to the anticipation of future growth.[3][5]
- Diversification and Investment Strategies:
- Investors have diversified their portfolios, seeking growth opportunities in European markets. The DAX's surge reflects renewed interest in European equities, driven by the potential for economic recovery and growth under new leadership in Germany.[4]
- The surge in the DAX can be partially attributed to Donald Trump's tariff rollbacks, as the easing of trade tensions between the USA and other countries boosts investor confidence.
- In addition to the tariff rollbacks, policy changes in Germany, such as the formation of a new conservative-led coalition government, have fueled optimism about economic growth and contributed to the rally in German stocks, including the DAX.
- The recovery and record-breaking rise of the DAX can also be influenced by potential US-EU deals and global economic trends, as improved relations between these two economic powerhouses contribute to a positive outlook for European markets.
- As the world economy continues to face uncertainty, companies such as Commerzbank and Krones demonstrate resilience, with Commerzbank reporting a net profit of 834 million euros in the first quarter, a significant increase from analysts' expectations.
