Stocks of Porsche and Daimler Truck & Co. experience significant setbacks following seismic activity within the DAX index.
Unhinged Analysis: The German DAX is taking a massive hit this Monday, with Trump's tariffs causing waves among investors, particularly those holding auto stocks like Porsche, Daimler Truck, and others. Here's why these equities are feeling the heat.
The DAX has taken a tumble, dipping by 1.9 percent, landing at 21,324 points. Its European counterpart, the Euro Stoxx 50, is also taking a hit, down by 1.77 percent and standing at 5,193 points.
The specter of a trade war has sent the market into a downward spiral. Over the weekend, U.S. President Donald Trump announced wide-ranging tariffs on goods from Canada, Mexico, and China. This move left many investors disillusioned, fearing a new era of inflation in the U.S. and dashed hopes of rate cuts. Trump hinted that the European Union might be next on his target list, warning of impending tariffs.
The DAX's performance in February has been dismal. After breaking record after record in January, the index has taken a steep nosedive. Since its interim low in early August, the benchmark index had soared by up to 28 percent.
DAX (WKN: 846900) ## Auto stocks like Porsche and Daimler Truck bear the brunt in the DAX
Auto stocks are feeling the brunt of Trump's tariffs. As of now, the stocks of Porsche, VW, and Daimler Truck are down by 5.3 percent, 5.6 percent, and 6.66 percent, respectively.
Trump's decisions against U.S. neighbors and China could have indirect repercussions on the domestic economy. For instance, these tariffs could hit Volkswagen, which operates a large plant in Mexico. Daimler Truck also has a presence in Mexico.
The stocks of Porsche AG couldn't escape the bearish trend. Investors in the sports car maker are grappling with a planned board shakeup as the company eyes a shake-up of both its finance chief, Lutz Meschke, and its sales chief, Detlev von Platen. Experts saw this as an opportunity for a fresh start following a recent lackluster performance, but the U.S. trade situation takes center stage for investors.
Curiously, Rheinmetall bucked the trend with a one percent increase, fueled by its defense business.
Based on data from dpa-AFX
Further Reading:
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Or:
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- The aerospace and defense company, Rheinmetall, is the only exception in the DAX, showing a 1 percent increase, despite the general downward trend.
- The finance industry might experience indirect consequences from Trump's tariffs, as companies like Porsche and Volkswagen could face financial difficulties due to their presence in Mexico and potential tariffs on their products.
