A worried about high tariffs and declining corporate profits, the stock markets went down on Monday. Of the Dax fell 2.5 percent to 12,270 points, the Eurostoxx50 lost two percent to 3369 points. In New York, the Dow Jones and the S & P 500 were each about one and a half percent lower at the close in Europe, with the Nasdaq composite losing more than two percent.
“The stock market environment is getting more uncomfortable,” said market analyst Jochen Stanzl from online broker CMC Markets. “US President Trump will not let up and seems to be willing in the trade conflict, still one on top.” Thus, the climate in the global economy noticeably rougher.
This was also evident in the Ifo Business Climate Index. This highly publicized stock market index of German business leaders was as bad as it had been for over a year, given the trade dispute with the United States. “Companies are adjusting to a more difficult environment,” said DZ-Bank chief economist Stefan Bielmeier.
Besides the threats from America’s president Donald Trump According to traders, even the recent profit warnings have dampened investors’ interest in levying 20% import duties on European cars. For example, German auto parts supplier Elringklinger cut its forecast on Monday, triggering a price slide of around nine percent to a nine-year low of EUR 11.83. Against the background of the reduction in the profit forecast of Daimler in the previous week and before the German post, profit warnings quickly triggered a sell-off, said a dealer.
The shares of Daimler Volkswagen and BMW were among the weakest stocks in the Dax with discounts of up to almost three percent. But also the papers of Peugeot and Renault as well as the rivals Ford and GM fell clearly. In addition to Elringklinger other suppliers came under the wheels.
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Among the biggest losers in German trade were Thus, the papers of Osram, which crashed by almost twelve percent to 41.05 euros – The lowest since February 2016. Since the profit warning has been back for some time, but after technical sales signals, the investors would have fled again in this poor market environment.
“The stocks of companies that receive their forecasts, are increasingly punished,” said a stockbroker. In addition, the uncertainty goes across all sectors. Carnival, the world’s largest cruise operator, whose shares are listed in London and New York, and the world’s largest cable manufacturer Prysmian from Italy, also capped their forecasts. The shares of both companies collapsed by more than ten percent. Carnival heard on the Cunard line, the cruise ships Queen Mary II and the Queen Elizabeth.
The technology and travel industry was also barely able to escape the general uncertainty. Since Trump has always warned against the theft of intellectual property, many investors feared consequences in trading for the chip industry. Stocks of corporations such as Infineon or ASML flew from the depots and lost more than five percent each.