10/02/25 09:45:35

Weekly outlook: “Tariffs only a short-term stress”

There are always new disruptive signals, this time it is the Trump announcement of tariffs on steel and aluminum. However, the stock markets are not really being knocked off their stride. 


10 February 2025 FRANKFURT (“Börse Frankfurt”). US President Trump continues to keep the markets on tenterhooks. He has now announced tariffs on steel and aluminum imports of 25 percent. He also wants to impose “reciprocal tariffs”, i.e. import duties on products on which another country imposes tariffs on US goods.

The DAX stood at 21,833 points on Monday morning after closing at 21,787 points on Friday. It had previously climbed to a new record of 21,945 points. The Stoxx Europe 600 also reached a new all-time high on Friday and is now slightly below it. The US markets ended Friday's trading session with losses, with good US labor market figures dampening hopes of further interest rate cuts. However, the Dow Jones, S&P 500 and Nasdaq are not far off their all-time highs. The development of the gold price continues to be striking with new highs, most recently at USD 2,895. 

“Use phases of weakness for acquisitions”

The DAX is one of the strongest indices worldwide in the new year. “The drivers were hopes for reforms after the German parliamentary elections, the previously low positioning and some improved economic indicators,” says Joachim Schallmayer from DekaBank. Some individual stocks also provided support, for example with strong quarterly figures. “If US President Trump imposes new tariffs on the EU, this could have a negative impact in the short term,” explains the Head of Capital Markets and Strategy. However, the bank expects an amicable agreement to be reached after a negotiation phase. Nevertheless, the DAX is now more susceptible to profit-taking in the short term. “Any phases of weakness are an opportunity to buy additional shares due to the good long-term prospects, moderate valuations and solid dividend yields.” 

 

“Short-term setback, even more dynamic development in the long term”

According to Martin Zurek from Weber Bank, the markets are increasingly questioning the high valuations of US computer chip stocks, some of which have come under pressure from China's AI model DeepSeek. He believes that short-term price setbacks in technology stocks are likely in the coming weeks. In the medium term, however, he sees further price potential - due to good quarterly results and continued positive growth rates. The latest developments surrounding DeepSeek are an important evolutionary step in AI development. The increased efficiency lowers the barriers to entry, which enables more competition and innovation. “This could lead to even more dynamic development in the technology sector in the long term,” says Zurek.

Technicals: Signs of an imminent correction?

The technical chart picture is mixed, as Ralf Umlauf from Helaba explains: “The upward trend is intact, and on the indicator side this is supported by existing buy signals on the MACD and DMI.” In addition, the ADX is at a high level and is rising again. However, the RSI and Stochastic no longer accompanied the most recent high with their own highs. “These negative divergences could be signs of an impending correction,” says Umlauf. 

This week's data highlights include the January inflation figures from the US and the reporting season continues. Deutsche Bank reports that 77 companies from the S&P 500 are reporting, including McDonald's, Coca-Cola, Applied Materials and Airbnb. From the Stoxx Europe 600, 79 companies publish their figures, including BP, Unicredit, Kering, Deutsche Börse, Siemens, Nestlé, Commerzbank and Hermès.

Key economic and business events of the week

Wednesday, February 12

14.30. USA: Consumer prices January. According to Commerzbank, the US inflation rate in January was probably influenced by a number of special factors that are difficult to assess, which increases uncertainty. With these caveats, it expects consumer prices to rise by 0.3% month-on-month, both overall and excluding volatile energy and food prices.

Thursday, February 13

8.00am. Great Britain: GDP 4th quarter. After stagnating in the third quarter, gross domestic product is even likely to have contracted slightly in the fourth quarter, according to DekaBank. It expects a slight decline of 0.1 percent compared to the previous quarter.

Friday, February 14

Friday to Sunday. Germany: Munich Security Conference. In addition to US Vice President James David Vance and US Secretary of State Marco Rubio, the new Special Representative for Ukraine Keith Kellogg has also been invited, as Deutsche Bank notes. Kellogg is expected to outline US President Trump's plans for a possible end to the Russia-Ukraine war.

14:30. USA: January retail sales. Weak car sales are a burden, says DekaBank and forecasts only a small increase of 0.1 percent month-on-month.

3.15 pm. USA: Industrial production January. For industrial production, DekaBank expects a boost for the production of utilities due to the cold temperatures, overall a plus of 0.3 percent compared to the previous month. 

By: Anna-Maria Borse, 10 February 2025, © Deutsche Börse AG

Anna-Maria Borse is a financial and business editor specializing in the financial market/stock exchange and economic topics.

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