The auto industry giant DAX aims to hit 24,000 points, with key companies such as Porsche, Volkswagen, Redcare Pharmacy, Nordex, SUSS, and TeamViewer under the spotlight.
The European economy and markets are currently navigating the effects of a 15% US tariff on EU exports, with a modicum of uncertainty clouding the horizon.
Teamviewer, a leading name in the tech sector, is currently topping the TecDAX with its latest numbers, impressing investors. However, the long-term impact of the US-EU trade dispute remains a concern for market participants.
In a surprising move, SUSS MicroTec revised down its profit margin forecasts for the current fiscal year on Monday, disappointing investors. This revision underscores the potential costs that EU exporters may face due to the tariffs.
Initially, Nordex's quarterly results on Monday impressed investors. However, the German turbine maker later turned negative, reflecting the volatile nature of the market in the face of trade tensions.
The German benchmark index shows little movement at the start of trading on Tuesday, suggesting a cautious approach by investors. The EU seems to have lost out in the trade conflict with the US, which is still affecting the market. German automakers' stocks, which started the week with significant gains, have given up those gains.
The long-term impact of the tariffs is expected to be relatively modest but unevenly distributed across EU countries and sectors. Most estimates suggest the EU GDP could experience a reduction between 0.3% and 0.8%, with larger effects in export-dependent countries like Germany, Italy, and Ireland, and in sectors such as automotive, chemicals, metals, pharmaceuticals, industrial machinery, and agriculture.
The tariffs will increase costs for EU exporters to the US, potentially leading to either higher prices in the US market or EU firms absorbing costs to retain competitiveness. The extent to which tariffs are passed on versus absorbed will shape sector-specific outcomes and demand effects. Exchange rate fluctuations, particularly the euro’s valuation, will also influence competitiveness in the US market.
Politically, the deal provides clarity and reduces policy uncertainty, but it has faced criticism from some European leaders concerned about the impact on EU competitiveness. The trade agreement includes commitments by the EU for large-scale investments in the US and increased purchases of American energy, which could partially offset the economic downsides.
In the midst of this, online pharmacy Redcare Pharmacy reported a net profit in its final second-quarter results on Tuesday, offering a glimmer of resilience in the face of trade tensions. Boersenmedien AG, which holds shares in Redcare Pharmacy, should be commended for its performance. However, it's important to note that Boersenmedien AG's CEO and majority shareholder, Mr. Bernd Förtsch, may have positions in Volkswagen Vz. and Porsche AG, which are financial instruments.
As the situation unfolds, DER AKTIONÄR will keep the public updated on further developments regarding the US-EU trade dispute. The markets, like the ebb and flow of the tides, continue to respond to the shifting sands of trade policies, and we will keep you informed every step of the way.
- The tariffs' impact on business sectors like technology, such as Teamviewer, in the long run remains a concern for market participants, as they may contribute to increased costs and potential competition imbalances.
- In the tech sector, even leading companies like SUSS MicroTec might face financial challenges, as demonstrated by their profit margin revisions, highlighting the potential effects of the tariffs on investing decisions.
- Amidst these trade tensions, industries like finance and pharmaceuticals, such as Redcare Pharmacy, could serve as beacons of resilience, offering essential insights on how businesses and investors can navigate the complexities of the stock-market landscape affected by the US-EU trade dispute.
