Weekly outlook: “Rapid return to highs unlikely”

The stock markets have recovered significantly since their lows. However, there can be no talk of any real easing. Many important economic and corporate figures are due this week.
 

While the stock markets have recovered significantly since their lows, there's no real easing of the situation. Many important economic and corporate figures are due this week.

April 28, 2025. FRANKFURT (Frankfurt Stock Exchange). The markets remain under the spell of Trump's tariff policy. While the US negotiations with key trading partners such as China have triggered a strong recovery in the US and European stock markets, as Ulrich Kater of DekaBank notes, "The US government's fundamental agenda of aligning the global economy more to the US's advantage remains intact."

Martin Zurek of Weber Bank is also skeptical: "The constant interplay of announcements, exemptions, and reversals is shaking the markets' confidence in the United States' economic reliability," he explains, also with a view to the weak US dollar. "It's no longer just about trade policy, but about confidence in the US's ability to lead the economy."

Zurek assumes that – until there is more clarity about the future economic outlook – the stock markets will move sideways with significant volatility. He also anticipates a noticeable slowdown in earnings growth for many companies. "A rapid return to the previous highs on the stock markets therefore seems unlikely."

The DAX is at 22,342 points on Monday morning, down from 22,242 at the close of trading on Friday. This puts the index well above its monthly low of 18,489 points and, at over 11 percent, is clearly back in positive territory this year. The Stoxx Europe 600 is up just under 2 percent. The US markets have also clearly recovered, but since the beginning of the year, the S&P 500 is still down 6 percent, and the Nasdaq 100 is down over 7 percent.

"Sentiment rather negative"

According to Thorsten Weinelt of Commerzbank, the news regarding tariffs will continue to keep the markets on edge. "However, the macroeconomic indicators due out this week should once again be a focus for investors," he says. Overall, sentiment remains rather negative. "However, the reporting season is going better than feared," he adds.

"Concerns thanks to Trump's tariff blunt"

Robert Halver of Baader Bank sees mixed signs so far regarding the reporting season. The bottom line is that the major US banks could more than offset the sharp increase in loan loss provisions with significantly increased income from the securities business. "However, when it comes to the US economic outlook, Trump's tariff blunt is causing concern." At least the valuation premium of tech companies compared to the overall US market has now returned to a more favorable level. Halver continues to see the German stock market as having an advantage over the US, even in the second row.

Extremely busy calendar

This week's calendar is full of economic data releases. In addition, 91 companies from the Stoxx Europe 600 are presenting their first-quarter reports, including Deutsche Bank, Deutsche Börse, BP, HSBC, Deutsche Post, Mercedes-Benz, and Shell. 183 S&P 500 companies are reporting from the US, including Exxon Mobil, Amazon, Apple, Microsoft, and Meta, according to Deutsche Bank.

Important economic and business dates of the week

Wednesday, April 30

3:30 a.m. China: April Purchasing Managers' Index. DekaBank expects a significant decline in the manufacturing index, citing the US tariff hikes at the beginning of April.

10:00 a.m. Germany: Q1 GDP. German gross domestic product may have risen surprisingly strongly in the first quarter, DekaBank believes. The reason: advance purchases by US customers who wanted to stock up on supplies at favorable conditions before the tariff increases.

11:00 a.m. Eurozone: GDP 1st quarter. For the eurozone, Commerzbank expects noticeable growth of 0.2 percent in the first quarter compared to the previous quarter. Spain's economy is likely to have grown the strongest again, it says.

2:00 p.m. Germany: April Consumer Prices.

2:30 p.m. USA: GDP 1st quarter. In the US, the economy likely stagnated, according to Commerzbank. This represents a significant slowdown after years of average growth rates of almost 3 percent.

4:00 p.m. USA: Consumer Expenditure Price Index March.

Thursday, May 1st

Labor Day. No trading on the Deutsche Börse marketplaces.

Japan: Bank of Japan interest rate decision. The Bank of Japan is likely to remain silent, according to Commerzbank.

Friday, May 2

11.00 am. Eurozone: Consumer prices April. According to DekaBank, the late Easter probably caused the usual seasonal price increases for many tourism services to be postponed until April. After a decline in core inflation in the previous month, it therefore expects an increase to 2.6%. For overall inflation, however, it is forecasting a slight fall to 2.1 percent, partly due to falling energy prices.

2.30 pm. USA: Unemployment figures for April. According to DekaBank, only a weak increase in employment is to be expected. The strong increase in March was almost exclusively due to a weather-related catch-up effect.

by Anna-Maria Borse, 28 April 2025, © Deutsche Börse AG