FRANKFURT (dpa-AFX) – Although investors have largely digested the temporary tariff shock from US President Donald Trump, there is unlikely to be any calm on the German stock market this week either. Although Trump withdrew his threatened punitive tariffs after agreeing to a Greenland agreement, geopolitical risks remain. In addition, the corporate reporting season is now really starting in Germany. In addition, there are, among other things, the US Federal Reserve’s interest rate decision and the Ifo business climate.
The recent recovery of the DAX shows that most investors believe in the long-term viability of the Greenland deal sealed at the World Economic Forum in Davos, commented portfolio manager Thomas Altmann from QC Partners.
For analyst Frank Sohlleder from the broker Activtrades, however, a certain degree of skepticism is still noticeable: “The Greenland thriller has been defused, but it is far from over.” And according to market observer Andreas Lipkow, the question remains as to which topic the USA will come next or which will be rehashed.
From the perspective of analyst Jochen Stanzl from Consorsbank, the DAX is in a neutral area at around 24,900 points, exactly between the annual low and record high. For a further increase, it is now crucial for companies to reassure companies that investors’ strong profit expectations for 2026 are realistic. After the Greenland issue, the market can now devote more attention to the reporting season.
In this country, annual figures from the software group SAP (SAP SE) and Deutsche Bank (Deutsche Bank) as well as their fund subsidiary DWS (DWS Group GmbHCo) are due on Thursday.
Internationally, the quarterly reports from Apple, Microsoft, Tesla and Meta (Meta Platforms (ex Facebook)) are also likely to have great impact over the course of the week. European heavyweights such as ASML (ASML NV) and LVMH (LVMH Moet Hennessy Louis Vuitton) round off the overall picture with their numbers.
Dekabank chief economist Ulrich Kater noted that the start of the US reporting season was positive. Although the vast majority of companies had positive earnings surprises, the price reactions were by no means uniformly good. “The increased valuations and corresponding expectations of investors have made the air for stocks thinner in the short term, despite good long-term prospects,” wrote Kater.
Regardless of balance sheets, defense stocks could remain in focus, believes investment strategist Mark Dowding of RBC BlueBay Asset Management. The events surrounding Greenland had increased the sense of urgency to increase defense spending in Europe. “Recent developments also urge caution against a lack of concern in financial markets, which have recently appeared to ignore rising geopolitical risks,” said Dowding.
Meanwhile, concerns about the political independence of the US Federal Reserve are growing after President Trump once again increased the pressure on Fed Chairman Jerome Powell. Metzler chief economist Edgar Walk therefore expects Powell to reject further interest rate cuts until the end of his term in office in May. No further falling interest rates are to be expected with the Fed’s decision on Wednesday. This not only sends an institutional signal, but also coincides with the recently noticeably brighter economic data in the USA.
Among the numerous German economic data of the week, the Ifo business climate on Monday is likely to stand out. The recent positive surprise in the purchasing managers’ indices provides a positive indication, concluded Simon Azarbayjani from Landesbank Helaba. An increase in the Ifo index is likely. Unemployment figures and preliminary inflation data for January are due to be published on Friday./niw/ajx/mis/jha/
— By Nicklas Wolf, dpa-AFX —
