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Irish Independent
a day ago
- Business
- Irish Independent
Markets hover near all-time high despite latest tariffs drama
In Europe, shares in Germany's DAX index hit a record high after the new coalition government there approved a €46bn package of corporate tax breaks as part of a push to revive economic growth, and ahead of an expected interest rate cut on Thursday from the European Central Bank. The Stoxx Europe 600 Index of European shares closed up 0.5pc after it pared some earlier gains following weaker-than-expected US jobs data. European shares are increasingly outperforming the US, closing what had been a yawning valuations gap. US stocks are close to their own highs, having recouped the 20pc suffered in April during the initial phase of the reaction to Donal Trump's tariffs. While the White House has rowed back on its most extreme tariff policies, it did pull the trigger on Wednesday on a huge 50pc tariff on imports of steel and aluminium, double the size of a tariff first announced in February. The steel levy, imposed for supposed national security reasons, is outside the scope of a US court that last week ruled much of the Trump tariff regime was illegal. The decision to push ahead with the higher rate came after the White House was stung by the new insult that Trump always chickens out (TACO). Canada, the biggest exporter of steel to plants including in the US industrial belt close to the border, will be worst hit. The MSCI index made up of a basket of stocks from across the developed world – and therefore a good guide to confidence in the global economy – touched an all-time high on Monday and remained close to it on Wednesday. In Dublin, the Iseq 20 index of Irish shares hit a high on May 29, and remains close to it. The numbers point to investors increasingly looking through the tariff threat, despite the noisy policy shifts, at least until next month when a number of 90-day tariff 'pauses' are due to roll off. Talks – including between the EU and US, Canada and the US, and the US and China – all aimed at influencing the July deadlines are currently taking place. 'As the market continues to move higher, I think investors are simply saying look, the trend is your friend, and just like white-water rafting they will let the market take them where it wants to go,' said Sam Stovall, chief investment strategist of CFRA Research in New York. 'The markets are going through some sideways movement until we get into July because then we'll have a better read on what kind of an impact tariffs have had on Q2 economic growth and earnings, and give a better idea as to what might happen for the remainder of this year.'
Irish Independent
27-05-2025
- Business
- Irish Independent
Stock markets rebound after latest Donald Trump tariff U-turn
The picture was much the same across Europe after Mr Trump said he would extend a deadline for talks into July. Markets in London and New York were closed for a long weekend. The Stoxx Europe 600 Index gained 1pc. In Ireland, the Euronext Dublin was up slightly less, with the Iseq 20 index of leading Irish shares gaining 0.92pc, with broad gains across sectors. The rebound came after stocks fell in Europe on Friday when Mr Trump threatened a shock 50pc levy on the EU starting June 1. He had complained that the EU lacked urgency in trade talks and unfairly targeting American companies with lawsuits and regulations. The rebound on Monday came after he agreed to push the deadline for a deal to July 9 following a phone call with European Commission president Ursula von der Leyen. "This is nothing more than the usual 'threat and retreat' that has been the modus operandi of this tariff tennis we have witnessed since the start of the year," said Florian Ielpo, head of macro research at Lombard Odier Investment Managers. "European valuations outperforming in this context and the EUR progressing vis-a-vis the dollar are yet more signs that European stocks continue to look attractive in this high-uncertainty environment." The EU had been slated for a 20pc tariff under the reciprocal rates announced in April, and a temporary pause took the rate down to 10pc through July 9. Ensuing expectations for a trade deal lifted sentiment, with the Stoxx 600 bouncing 18pc from an April low through its recent high last week. Cyclical stocks had a sharp rally. "'Less bad news' has been lifting valuations, but now we need 'more good news' to fuel this rally – good news on both the fiscal front and the growth front," said Mr Ielpo. Among individual movers, Thyssenkrupp AG advanced 8.3pc after it said it planned to become a strategic holding company with independent business segments.
Irish Independent
07-05-2025
- Business
- Irish Independent
Markets slip amid fresh US tariff talk, but AIB bucks the trend
The latest strain came despite a lack of specifics on how or when either sector would be affected. Lack of any sign of progress on purported talks between the US and China to reopen trade between the world's two biggest economies also weighed on investor mood. The dollar is carrying the brunt of the impact as investors have reacted to uncertainty by shifting away from US assets, pushing the euro, yen and Swiss franc higher. On Tuesday, the dollar index, which measures the greenback against a basket of currencies, including the yen and the euro, fell 0.38pc to 99.43. The euro was up 0.27pc at $1.1346. Against the Japanese yen, the dollar weakened 0.6pc to 142.84. The Canadian dollar and sterling also strengthened versus the dollar though the Swiss franc weakened. The latest falls in equities was orderly and not uniform. In Dublin, the Iseq 20 index of leading shares closed down but AIB ended the session up on Tuesday and above €6 each, edging towards the territory of a putative directed buyback of €1.2bn of State-owned stock. But the shares were unusually volatile – bouncing from a low for the day of €5.87 and a high of €6.155. That repeated a pattern of big intra-day swings seen last week, with similar daily highs and daily lows recorded on Friday and Thursday. The bank's board will decide by on Thursday whether to go ahead with the buyback at a minimum of €6.26 a share after shareholders overwhelmingly approved the proposal last week despite a yawning gap between the trading price of the stock and the level the deal was struck. AIB must determine the plan is in the bank's best interests, including pricing, if it is to press ahead with the deal. The closer the stock is to the €6.26 level the more likely the board is to be comfortable with pressing go on the deal. In London, shares in BP rose after a Bloomberg report on Monday that Shell is working with advisers to evaluate a potential acquisition of its UK rival. The London Stock Exchange was closed on Monday due to a bank holiday. The takeover report suggested Shell has discussed the feasibility and merits of a BP takeover with advisers in recent weeks, although it's waiting for further stock and oil price declines before deciding whether to pursue a bid. A combination of Shell and BP would be one of the oil industry's largest-ever takeovers, bringing together iconic British majors and long time rivals. BP is vulnerable to a takeover after its shares have lost almost a third of their value in the last 12 months as a turnaround plan has fallen flat with investors and oil prices tumbled. BP has been battling prolonged underperformance stemming in large part from a net-zero strategy embraced by former CEO Bernard Looney. His successor, Murray Auchincloss, announced a reset in February that included a pivot back to oil, cuts to quarterly share buybacks and promises to sell assets.
