Instigation Propels Advancement of Sartorius Documents
The U.S.-China trade dispute, which extended in August 2019, has continued to impose volatility on global stock markets and exert downward pressure on the German economy.
On Tuesday, the German benchmark index, DAX, lost 0.2% to 24,025 points, while the MDax also recorded losses. Hannover Re's shares fell in the Dax after reporting half-year results and disappointing with its operating result, while SAP's stock suffered losses of over 6%, returning to the level of late April.
However, Sartorius was the biggest winner in the Dax with a gain of nearly 8%. Analysts at Jefferies upgraded Sartorius' stock to "buy" from "hold" and raised their price target. An below-average growth is being priced in for Sartorius and its biotech subsidiary Sartorius Stedim.
The economic outlook is deteriorating, as implied by the losses in the stock markets. Thomas Altmann of the broker QC Partners said the worst-case scenario has been avoided, but the extension of the trade dispute has not provided any tailwind for the stock markets. The uncertainty about tariffs remains for another 90 days, as U.S. President Donald Trump extended the pause on China's threatened tariffs until November 10.
For Germany, as an export-driven economy heavily linked to global supply chains and trade with China, the extension of the dispute further weighed on economic performance. The tariffs and friction disrupted manufacturing and export activities, contributing to slower growth. German industries faced uncertainty over input costs and demand fluctuations from key trading partners, including China and the U.S.
The all-time high set by the DAX a month ago at 24,639 points is now further away, reflecting the impact of the trade dispute on the German economy. The Norma Group, however, performed better than expected in the second quarter and confirmed its annual targets, with its shares rising by over 15% in the SDax.
The extension of the U.S.-China trade dispute has contributed to continued global stock market volatility and imposed downward pressure on the German economy through disrupted trade and supply chains. The broader impact includes weaker investment and production, as tariffs raise costs and reduce demand, undermining confidence in global trade.
This environment has contributed to range-bound or cautious equity market behavior until more definitive trade agreements are reached. The uncertainty caused by the trade dispute has propagated instability in both financial markets and international trade-dependent economies like Germany.
Investors might find it challenging to navigate the stock-market amid the ongoing U.S.-China trade dispute, as the volatility persists, potentially influencing future finance decisions. The volatile stock-market, such as the DAX in Germany, could impact companies like SAP, Hannover Re, and potentially others, as their stock prices respond to uncertain trading conditions and pressures from slowing economies.
