Stock Markets Remain Extremely Volatile
The stock markets remain extremely volatile. One thing you can count on with the new U.S. administration is that no day is like the other. Shortly after the interest rate weapon had to be shelved again for another 90 days, China was hit with additional punitive tariffs of 20 percent, bringing total U.S. tariffs on China to 145%. This led to another sharp corrective pullback in the U.S. markets, which also weighed heavily on European stock markets. Due to the high volatility, this likely caused some serious headaches for investors. Almost overlooked amid all this is the fact that, in Germany, lying may soon be punishable under the new federal government — in other words, that there is a coalition agreement between the CDU/CSU (Union) and SPD that may ultimately help the AfD become the strongest party. Too much SPD, too little Union from the election campaign perspective — considering that the Social Democrats entered negotiations with just 16 percent of the vote, they negotiated an outstanding outcome for themselves. The Union's lack of courage will likely be punished, and the German markets may suffer as a result. The fear of a minority government was simply too great.
On Thursday, SAP AG and Deutsche Bank stocks caused a stir with gains of over 7 percent each.
Positive: No New Lows in the Volatile British Stock Market
In the UK, stock markets were also volatile on Thursday, but the buying enthusiasm seen on Wednesday was no longer evident. The Trump-inspired rally from Wednesday evening had been too exaggerated. By the end of the trading day, the FTSE 100 closed down 2.3 percent. JD Sports and Marks & Spencer were the stocks particularly popular with investors. JD Sports outdid itself, closing the day up 22.9 percent. Marks & Spencer shares ended the day with a gain of over 12 percent. Energy stocks like Shell and BP, on the other hand, closed down by 9 percent, ranking at the bottom of the list.
Both the DAX and FTSE 100 have not formed new lower lows, which may suggest a continuation of the recovery initiated yesterday — and a strong Friday could lead to a more or less conciliatory end to the trading week.
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