FRANKFURT (DEUTSCHE-BOERSE AG) - In just two days, the (stock market) world could look entirely different - that's when the deadline for tariff negotiations with the US expires. Despite this, many analysts are still recommending entry into the market. Few economic data releases are expected this week.
July 7, 2025. Trade policy is back in the spotlight. On Wednesday, the ninety-day deadline set by US President Trump for negotiations to prevent "reciprocal" tariffs ends. He has already announced that, in the days leading up to the deadline, various countries would be notified about the planned tariff increases.
"The markets seem to have moved away from the worst-case scenario and are assuming that the economy will ultimately weather Trump's tariff policy without a crisis," explains Commerzbank analyst Bernd Weidensteiner, reflecting on recent market developments. He considers this view potentially too optimistic. After all, he says, "the really tough issues" in the negotiations are still to come, and Trump could once again wield the "tariff hammer." "Politically, he might also be interested in reigniting the tariff conflict to distract from possible failures in other policy areas."
On Monday morning, the DAX stands at 23,750 points. On Friday, the index closed at 23,787 points, while the Stoxx Europe 600 ended at 541 points. US exchanges were closed on Friday for Independence Day.
"Use Major Price Declines for Additional Purchases"
According to Robert Halver of Baader Bank, the markets have so far remained relatively unconcerned, but fundamentally, the "trade cow" is not yet off the ice. "Even if the world doesn't become a globalization diaspora, in the end, the tariff level on US imports will be at least three times higher than before Trump took office," he notes. Price corrections are possible. "Nevertheless, investors will stick to their assessment that Trump's tariffs won't cause major wounds. Therefore, significant price declines should be used for additional purchases."
"Outlook for German Equities Positive"
According to Ulrich Kater of DekaBank, German stocks have performed "exceptionally well" with almost 20 percent gains in the first half of the year - especially considering the numerous geopolitical turbulences and the trade conflict with the US. However, over the past six weeks, there has been "only" a sideways movement, while US stocks - at least in US dollars - have continued to post gains. He points to the upcoming reporting season for the second quarter, set to begin in mid-to-late July. "In the medium and longer term, the outlook for German equities remains positive, so investors should consistently buy during periods of weakness."
Chart Analysis: "Don't Be Lulled into a False Sense of Security"
According to chart analyst Christoph Geyer, the DAX has successfully tested its support zone but has not returned to its previous record high. Instead, it is now treading water. "Even though this is happening above the support zone, one should not be lulled into a false sense of security," he notes. The upcoming seasonal phase is not particularly promising, and the current stagnation is a sign of waiting rather than investing. Given the upcoming seasonality, Geyer considers such waiting to be unlikely to succeed and recommends stock picking and unwinding individual risk positions.
Key Economic and Business Data
Monday, July 7
8:00 a.m. Germany: Industrial production for May.
Tuesday, July 8
8:00 a.m. Germany: Exports for May. Helaba expects a 1.5 percent decline compared to April.
Wednesday, July 9
"Tariff deadline." Deadline for US negotiations with other countries on "reciprocal" tariffs ends.
8:00 p.m. US: Minutes from the US Federal Reserve meeting of June 17/18.
by: Anna-Maria Borse, July 7, 2025, © Deutsche Börse AG
(The content of this column is the sole responsibility of Deutsche Börse AG. These articles do not constitute an invitation to buy or sell securities or other assets.)
