Record-Breaking DAX: Trading High Amid Trump's Tariff Tango
Stock soars to new heights following Trump's market downturn (Dax)
In an surprising twist, the DAX soared to an unparalleled high, edging past the 23,500 mark, a month after taking a nosedive due to President Trump's tariff shitstorm. The climb was more substantial than expected.
The Dalton Research Index (DAX) jumped 0.5 percent to 23,484 points at the opening bell, breaching its previous high of 23,476 points. It then moved further up to an astounding 23,519 points. This leap comes after a tumultuous month battling Trump's tariff shenanigans.
Following the trade pact between the US and the UK, stock exchanges ended the day in the green last Thursday. The DAX concluded 1 percent higher at 23,352.69 points. US stock markets also reacted favorably to the deal, but it failed to induce euphoria.
Reflecting on the deal, Thomas Altmann, a portfolio manager at QC Partners, issued a word of caution. “Everyone's now holding out hope for more deals, but it’s crucial not to overlook that the foundation for this deal was different and simpler. After all, the UK had an existing trade surplus with the US, so it didn't need to make as many concessions."
Commerzbank Faces the Spotlight
After enduring a severe drop to almost 18,490 points in early April, with Trump announcing steep tariff increases and China firing back, the DAX has since demonstrated a robust recovery of approximately 27 percent. It's now up 18 percent year-to-date.
As the week draws to a close, attention centers on China's economic health. Based on customs data, China's exports increased by 8.1 percent year-on-year in April, while imports declined by a minimal 0.2 percent. These statistics contradict the experts' predictions of a much sharper trade decline due to the trade disputes with the US.
Companies in the Limelight
The focus is particularly on Commerzbank's quarterly report. In early April, the German bank, currently courted by UniCredit, acquired earnings of €834 million in the first quarter, marking an increase of 11.7 percent. Analysts had anticipated a slide to €698 million. Investors are also closely monitoring results from smaller companies such as Krones and Bechtle.
In the US, the annual meetings for defense titan Lockheed Martin and biopharma company AbbVie are the prime attraction.
Shares in Krones, the world's leading manufacturer of beverage filling equipment, experienced a surge in the MDax, ascending by nearly three percent. The company has managed to maintain stability in the face of growing economic uncertainty due to the looming threat of US tariffs.
Source: ntv.de, chl/DJ/rts/dpa
Brief Insights:
- Following the trade agreement between the US and the UK, stocks closed in the green, with the DAX increasing by 1 percent.
- Trump's overall tariff policy has remained aggressive, contributing to ongoing uncertainty and market volatility.
- Extended periods since Trump's inauguration have shown stock indexes in Europe, including Germany, rising in US dollar terms while US markets declined.
- Commerzbank's challenging operational environment due to Trump's tariff announcements reflected in the slowdown of mergers, acquisitions, and IPO activity, key revenue sources for financial institutions.
- The combination of market volatility, weaker economic demand, and reduced deal flow likely pressured Commerzbank’s financial performance in that quarter.
- The DAX, paralleling the trade agreement between the US and the UK, climbed 1 percent, reaching a height of 23,352.69 points.
- Despite the climb, the tariff index (DAX) saw a significant drop to nearly 18,490 points earlier in April, following Trump's announcement of steep tariff increases.
- Amid the ongoing tariff tango between Trump and various international markets, the tariff index (DAX) has demonstrated a robust recovery, with a surge of approximately 27 percent since early April.
- In the face of growing economic uncertainty due to looming US tariffs, the world's leading manufacturer of beverage filling equipment, Krones, managed to maintain stability and experienced a surge in the MDax, ascending by nearly three percent.
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