Tariffs of 25 percent on automobiles not produced in the USA will primarily affect German car manufacturers, whose share of foreign brands in the USA is nearly 60 percent. However, this will also impact US citizens, who will have to pay more for their cars in the future. Even Elon Musk seems to be struggling under this announcement, as a significant number of Tesla model components come from abroad.
Although the DAX has reacted to this news, investors and traders still appear unwilling to give up the index's ongoing strong phase. During the trading day, the index experienced notable losses at times, closing the Xetra session down 0.7 percent. However, after-hours trading saw the index recover toward its opening level, indicating intrinsic strength.
Unjustified Decline of Heidelberg Materials and Siemens Energy
Zalando, Symrise, and Henkel were the top three performers on the DAX on Thursday. Meanwhile, Heidelberg Materials, which lost 5.8 percent, and Siemens Energy, which dropped 4.9 percent, ended up at the bottom of the index. These were the high-flyers of recent weeks and months, making their sharp decline difficult to justify on a fundamental basis. This movement suggests weak hands taking profits, as Heidelberg Materials' management, for example, decided to increase dividends—something that should typically please investors. The same applies to Siemens Energy. Fundamentally, there are currently no concerning news reports that would justify such a significant sell-off.
Looking ahead, as the index rebounded to its morning levels, a rather positive candlestick formation has emerged in the chart, reflecting buying pressure. Investors and traders may be in for a positive weekly close this Friday. While appearances can be deceiving, in the stock market, those who take calculated risks are often rewarded for their courage.
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