Market Summary - July 14, 2025
The European stock market experienced a downturn today, primarily influenced by former President Donald Trump's recent announcement of a 30% tariff on all European goods, set to take effect on August 1st. This unilateral decision has led to a significant negative sentiment across major indices, with the German DAX index suffering the most, down by 0.85%. Other indices, including the French CAC40 (-0.4%), Italian FTSE MIB (-0.05%), Swiss SMI (-0.2%), and Spanish IBX35 (0.25%), also reported losses, while the British FTSE 100 (+0.4%) and Polish WIG20 (+0.2%) showed slight resilience.
Impact on Sectors
The EU has expressed concerns that Trump's tariff threats could jeopardize transatlantic trade, which was valued at nearly €1.7 trillion last year. The bloc is advocating for a negotiated resolution and has postponed retaliatory tariffs on $25 billion worth of US exports.
Among the Euro Stoxx 600 sectors, consumer discretionary goods stocks faced the steepest declines, particularly in the German automotive sector, with notable drops in shares of major companies: BMW (-1.75%), Mercedes-Benz (-1.5%), Volkswagen (-1.45%), and Porsche (-1%). The German tech sector also saw declines, with SAP down by 1.4% and Infineon by 1.9%. French luxury stocks were similarly affected, with LVMH down by 1.6% and Kering by 1.2%.
Conversely, some healthcare stocks demonstrated resilience, with AstraZeneca (+1.4%), Sanofi (+0.17%), Bayer (+0.6%), and Novo Nordisk (+0.1%) showing positive performance amidst the broader market decline.
DAX Futures and Technical Analysis
DAX futures have declined for the third consecutive session, influenced by the newly announced tariffs. The DE40 contract has reached the 38.2% Fibonacci retracement level, which is acting as a key support level. Despite the uncertainty surrounding tariff negotiations, the contract has only briefly dipped below its 30-day exponential moving average, indicating some underlying resilience. However, with the deadline for tariff negotiations approaching and tensions unresolved, further downside pressure is anticipated. A potential scaling back of the proposed levies could lead to a rebound towards historical highs.
Company News
- BASF (BAS.DE): Shares fell by 0.4% after the company revised its 2025 guidance, lowering EBITDA forecasts to €7.3–€7.7 billion. Analysts view this adjustment as a realistic reset, reducing the risk of further downgrades.
- Brenntag (BNR.DE): Shares dropped over 4.4% following an unexpected cut to its full-year EBITA guidance due to weaker demand and pricing pressures. The scale of the downgrade surprised the market, with preliminary Q2 results missing estimates.
- Loro Piana: A Milan court has placed the luxury brand under judicial administration for one year amid allegations of labor exploitation by its suppliers. LVMH, which owns Loro Piana, has not commented on the situation, and shares are down by 1.7%.
- Saab (SAABB.SE): The Gripen fighter jet is seeing renewed interest for export as European defense budgets increase amid geopolitical tensions. Saab is optimistic about potential deals in various countries, with shares up by 0.15%.