DAX: Investors Offload Risk as Trump Touts Broad Tariffs
Trump set to announce sweeping tariffs on all goods in addition to autos, steel and aluminum.
- Trump announces Liberation Day
- Investor confidence unsettled by sweeping tariffs talk
- Defense stocks remain bullish
The DAX took another hit on Monday, dropping 1.25% at one point before recovering some ground. Investors see increasing risks from a possible trade tariff war and turn to safe have assets such as GOLD
ECB’s Lagarde Attempts to Rally Investor Confidence
In an interview with France Radio, the ECB president spoke about how the EU must become more independent.
Lagarde cited the new trade tariffs coming into effect on Wednesday 2, as an opportunity to “march towards independence”
Adding that the likely tariffs will allow Europe to take better control of its future.
“He calls it Liberation Day in the United States. I see it as a moment when we must together decide to take better control of our destiny, and I think it’s a step towards independence.”
The ECB chief also reiterated her forecast of a decline of 0.3% in EU growth from US imports during the first year of tariffs. Adding that retaliatory tariffs would further decrease growth to 0.5%.
It seems more like a call to keep investors faith in the EU economy, rather than an independent stock market analysis.
DAX Live Chart
Defense Stocks Continue to Hold Rally
While the DAX is down 0.87% defense stock Rheinmetall is up 0.55%, having rallied as high as 0.90% earlier.
The German government has promised to spend an extra €200 billion on military spending. At the same time European leaders and the EU Commissioner are doing their best to keep the war in Ukraine going.
The German government also recently passed a bill for an infrastructure fund of €500 billion. Presumably, there will be benefits for defense stocks from that spending also.
However, the positive effects of the news of extra spending was short lived, as investors weigh just how much and for how long splashing funds will add to growth.
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