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Germany’s DAX index went to a record more on Friday, becoming the first major European reference to recover the losses triggered by Donald Trump’s pricing threats, because the optimism of investors on American trade agreements has stimulated the world markets.
The Dax was 0.6% higher in the morning trade, after the announcement on Thursday of an American trade agreement-UK was followed by a call between the American president Trump and the new Chancellor of Germany, Friedrich Merz, in which they agreed to quickly resolve commercial disputes. The United States and China should also meet this weekend to try to defuse the tariff war.
Merz, who warned after his electoral victory that Europe had to “achieve independence” of the United States, also took a conciliatory tone with Trump, saying that Washington remained an “essential friend and partner”. The two leaders agreed to meet in the near future, said a spokesperson for the German government.
The return of the Dax to the peaks of all time also reflects the wave of enthusiasm for German stocks Stiré earlier this year by Merz’s plans to increase loans and inject hundreds of billions of euros into the military and the country’s infrastructure.
Emmanuel Cau, head of the European Strategy on Actions at Barclays, said that the news for sales had given a wide boost to the stock markets.
But he added: “There is an additional degree of excitement in Germany as part of this renaissance account and the arrival of the new government. There is more and more interest for Germany.”
European actions have surpassed their peers of Wall Street this year due to optimism concerning defense expenses combined with growing fears concerning the impact of Trump’s trade war on the American economy.
The Dax increased by almost 18% this year. Defense actions have worked sharply following spending commitments, with more than 170% of Rheinmetall.
The German stock market has also benefited from a good performance of European banks. Deutsche Bank shares increased 43% this year.
While American actions have also recovered their losses since the pricing announcements of Trump’s “Liberation Day” in early April, the S&P 500 reference remains well below its February summit and is down almost 4% until now in 2025.
The outperformance by Europe of Wall Street this year has partially reduced a large evaluation gap between American actions and the European actions that had expanded in recent years due to an implacable rally in American technological actions.
“Peak Trade Fear is behind us,” said Laura Cooper, a global investment strategist at Nuveen. But she added that “jerky price action episodes” should be expected because the disruption of the prices is rising in the world trading system.
But asset managers have also urged caution, given Trump’s strong rhetoric on tariffs and broader concerns concerning the development of American policies.
“For the moment, this [rally] holds, “said Kevin Thozet, member of the Carmignac investment committee.” But it is not easy that he will continue in this way for a very long time. The peak of Trumpism can be behind us, but uncertainty is still there. »»
