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The DAX 30, and European equities indices more generally, started this week in the red. The DAX started the session a little more than 0.7% down on Friday’s close and while it has recovered by 0.3% since is still 0.42% down into the afternoon.
Markets were hoping for some clear policy statements to come out of Donald Trump’s inauguration speech as on Friday as he officially took office as President of the USA. His maiden press conference just over a week previously did not address specifically any details of his administration’s intended policy on international trade or domestic infrastructure spending. Both of those policy areas are of key importance to the wider international financial markets.
The inauguration speech again lacked any specifics and market participants have been left to interpret tone rather than details. In that line, Trump’s continued reference to ‘America First’ and vows to focus on putting jobs back in American factories has led to concerns that a ‘protectionist’ approach to international trade may be a key feature of as-yet-unclear policy. Various comments over the past couple of week with regard to potentially higher taxes for imports, one of which was directed specifically at German carmaker BMW’s new plant being built in Mexico, have contributed to that general interpretation. Time will tell to what extent such statements will lead to real changes in the U.S. market environment for European exporters but in the meanwhile concerns are weighing on European equities and have halted the Trump-rally in evidence since his November election victory.
Four companies to have lost more than 1%. Commerzbank, which is down 1.28% after strong gains towards the end of last week, Bayer, down 1.02%, Merck, the pharmaceuticals company, which has lost 1.07% and steel maker ThyssenKrupp, -1.25%.
