DAX Trades Higher on Hopes of Ceasefire – Porsche & Puma Stocks Down
The market sees the proposed ceasefire as breakthrough in the ongoing war between Ukraine and Russia.
- Trump propose 30-day ceasefire to follow negotiations
- Military spending is still top EU priority
- Porsche and Puma share slump
The DAX managed to rally today by 1% fueled by hopes of peace in Ukraine. Geopolitical stability is a prime factor, and a conclusive peace deal would allow Germany to resume cheap energy imports.
30-Day Ceasefire Prelude to Permanent Peace Deal
The DAX has been under pressure recently as tariff woes increase and the ECB loosening cycle comes closer to its end. However, the possibility of a peace deal in Ukraine has given the index a boost.
Trump’s proposal of an end to all attacks including air and missile strikes is the first step to a possible lasting peace deal.
Ukraine has accepted the ceasefire deal allowing US aid and intelligence to resume again. The US had halted intelligence collaboration and aid to Ukraine after President Zelenskyy’s spat at the White House.
The EU still remains committed to increasing arms spending with a mega €850 billion fund for defense.
Germany’s CDU party, likely to lead the next coalition government has committed €200 billion in increased military spending. Rheinmetall shares lead the DAX again today, up 7.7%.
DAX Live Chart
Porsche and Puma Take a Beating
Porsche warned that weak sales and higher costs would hurt 2025 earnings. This forecast is without taking into account possible US tariffs on EU goods.
Porsche is planning to cut 4,000 jobs after 2024 saw a decline in sales of 3%. Recent investments also squeezed their profit margin to 10-12%.
The share price was down 4% in early trading this morning, the biggest decliner in the DAX.
Puma shares also took a knock this morning after the sportwear maker gave a disappointing forecast for 2025.
The company forecasts looked lower due to weak demand from the US and China, predicting sales growth to be smaller than 2024 at 4.4%. Shares slumped 13.4% in overnight trading.
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