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Reuters
28-07-2025
- Automotive
- Reuters
European shares jump to 4-month peak on US-EU trade deal
July 28 (Reuters) - European shares advanced to a four-month high on Monday, led by gains in pharma and semiconductor stocks, after the EU signed a trade deal with the United States, avoiding steeper tariffs ahead of the August 1 deadline. The pan-European STOXX 600 index (.STOXX), opens new tab rose 0.7% by 0815 GMT. Most regional bourses were also in the green, with Germany's blue-chip DAX (.GDAXI), opens new tab rising 0.6% and France's CAC 40 (.FCHI), opens new tab gaining 0.8%. UK's FTSE 100 (.FTSE), opens new tab added 0.1%. The trade agreement imposes a 15% tariff on most EU goods and requires the bloc to invest around $600 billion in the U.S. Tariff rates on spirits are still under negotiation. The deal "is positive for markets because it removes a lot of the uncertainty", said Anthi Tsouvali, multi-asset strategist at UBS Wealth. European companies are now "getting that clarity and I didn't see anything in the fine print that is outward and more negative," Tsouvali said. Expectations of similar trade agreements before the August 1 tariff deadline have helped lift the benchmark STOXX 600 to within 1.8% of its all-time high hit on March 4, marking a 19.5% rebound from its April trough. Pharmaceutical (.SXDP), opens new tab and automobile stocks (.SXAP), opens new tab - sectors with the largest exports to the United States - hit their highest in one month and two months, respectively. The baseline tariff brings tariffs for the auto industry down from the 27.5% faced before. Pharma heavyweights Novo Nordisk ( opens new tab and Roche (ROG.S), opens new tab rose 0.4% and 1.4%, respectively. Shares of Stellantis ( opens new tab and Volvo Cars ( opens new tab, which have pulled their 2025 financial guidance due to U.S. trade uncertainty, rose marginally. Spirits stocks Pernod Ricard slipped 1.4% and 1.3%, respectively, as the trade deal did not contain any decision regarding the spirits sector. Heineken ( opens new tab fell 4.3% after the Dutch brewer said it was weighing all options to deal with growing tariff challenges long-term, including shifting manufacturing. LVMH ( opens new tab rose marginally after media reports said French luxury goods group is in discussions with multiple buyers to offload its fashion label Marc Jacobs. ASML ( opens new tab, the world's biggest supplier of computer chip-making equipment, jumped 4.2%, while chipmakers Besi ( opens new tab and ASM International ( opens new tab were among the top gainers on the index adding 5.5% and 3.8%, respectively. In a week full of key events, investors will closely monitor policy decisions from the Federal Reserve and the Bank of Japan, earnings from several "Magnificent Seven" companies and the looming August 1 tariff deadline.
CNBC
13-05-2025
- Business
- CNBC
UBS Wealth downgrades U.S. stocks as others on the Street raise their forecasts
UBS Wealth on Tuesday moved to the sidelines on U.S. stocks, casting doubt on the recent rally even as others on Wall Street have grown more bullish. Mark Haefele, the firm's investment chief, downgraded U.S. equities to neutral from attractive, noting he's not bearish or telling clients to sell but rather "taking advantage" of the runup in stocks over the past month after investors had grown too pessimistic in early April after the U.S. announced its new tariff policy. Haefele's latest skepticism reverses an upgrade to U.S. stocks that he made on April 10, the day after President Trump placed a 90-day pause on many tariffs he had imposed the week before. The S & P 500 has climbed about 11% since the UBS upgrade, making the risk-reward more balanced, Haefele said. The buyside chief investment officer also tied his call to Monday's major leg up in stock prices following the announcement that China and the U.S. slashed reciprocal tariffs for three months. That helped ease short-term fears that Trump's plan for steep tariffs was spurring a trade war between the world;s two largest economies. "While the 90-day cooling-off period has provided a reprieve, uncertainty is still high, and investors will soon begin to focus on whether this temporary fix can evolve into a lasting agreement," Haefele wrote to clients. "The constructive tone from both sides suggests a willingness to negotiate further, but challenges in forging a durable deal could lead to bouts of volatility." Haefele recommended that clients keep a strategic allocation to U.S. stocks, expecting equities will rise over the next 12 months. The UBS shift on U.S. stocks puts it at odds with others on the Street who have recently become more upbeat. David Kostin, chief U.S. equity strategist at Goldman Sachs, raised his 2025 target for the S & P 500 back to 6,100 from 5,900 on Tuesday, citing lower tariff rates, an improved outlook for economic growth and reduced odds of a recession. Ed Yardeni, president of Yardeni Research, also lifted his S & P 500 target back up to 6,500 from 6,000, pointing to a shifting view around the impact of Trump's tariff policy.
