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April 7, 2025

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DAX, FTSE MIB, AEX, IBEX 35, SMI indices crashed: buy the dip?

4 Mins Read

The DAX index continued its strong downward trend on Monday as investors dumped their global equities as risks jumped. It slumped to a low of €18,900, its lowest level since September 12 last year. It has plummeted by more than 17% from the highest point this year.

The German DAX’s crash has mirrored the performance of other global indices. In Europe, the CAC 40 index dropped by 5.65% on Monday, while the Euro Stoxx 50 moved downwards by 6%. Other indices like AEX, FTSE MIB, and Swiss Market Index (SMI) also dived by over 5%.

Donald Trump adamant about tariffs

Top indices like the German DAX, Swiss SMI, Italy’s FTSE MIB, and the French CAC 40 dropped as Donald Trump remained adamant about the US tariffs on other countries. In a Truth Social post, Trump lamented about the substantially high trade deficit the US has with the European Union. 

Data shows that the US had a goods trade deficit worth over $235 billion with the EU last year, a 12.9% increase from a year earlier. However, the trade deficit narrows substantially when services are included. The US had a service surplus of over $109 billion in 2023, meaning that the overall surplus deficit is less than $60 billion. 

Also, the numbers don’t factor the fact that many US companies do a lot of business in Europe. Some of these firms are Procter & Gamble, Apple, Microsoft, and Colgate-Palmolive.

Trump insists that his tariffs are necessary to reduce these tariffs, which he believes are unsustainable. However, analysts worry that his thinking is flawed. For one, his basis for the 20% tariff he imposed on Europe was wrong.

Instead of imposing a real reciprocal tariff, Trump simply calculated the trade deficit, divided it with the total exports to the US, and then multiplied it with 100. He then divided the final figure with 2, coming up with 20%, a figure that economists and non-economists believe is flawed.

At the same time, a trade deficit is not necessarily a bad thing. A deficit is calculated by subtracting imports from exports. The challenge is that the US imports so much without selling more goods.

One way to lower the deficit would be to boost exports, which is highly unlikely because of the high labor costs and regulations. 

Top DAX, IBEX 35, FTSE MIB, and SMI indices laggards

Most companies in the DAX, IBEX 35, FTSE MIB, and the SMI indices have crashed as investors predict a recession in the both sides of the Atlantic. The most affected companies are those that do a lot of the Atlantic. 

Infineon, a top semiconductor in the DAX index, has plunged by over 22% in the last week because of its exposure to the US, which accounts for 10% of its total sales.  The other top laggards in the DAX are firms like Siemens, Adidas, Siemens Energy, Mercedes Benz, and Volkswagen. 

The top laggards in the IBEX 35 are companies like Repsol, ArceloMittal, IAG, and Bankiter, and Amadeus were among the top laggards. 

Is it safe to buy the dip in these European indices?

Analysts are questioning whether this is the best time to buy the dip in European indices like the German DAX, IBEX 35, FTSE MIB, and Swiss Market Index (SMI).

Most strategists believe that many of these indices will bounce back later this year once the market exits the extreme fear zone. Many of them recommend staying on the sidelines until the market stabilizes. Others recommend using the dollar cost averaging approach, which involves buying the dip slowly as the dip intensifies. 

They believe that these indices will ultimately bounce back once the Federal Reserve and the European Central Bank (ECB) intervenes.

The post DAX, FTSE MIB, AEX, IBEX 35, SMI indices crashed: buy the dip? appeared first on Invezz

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In Business

Buffett denies rumors after Trump shares wild claim that investor backs president crashing market

3 Mins Read

Warren Buffett went on the record Friday to deny social media posts after President Donald Trump shared on Truth Social a fan video that claimed the president is tanking the stock market on purpose with the endorsement of the legendary investor.

Trump on Friday shared an outlandish social media video that defends his recent policy decisions by arguing he is deliberately taking down the market as a strategic play to force lower interest and mortgage rates.

“Trump is crashing the stock market by 20% this month, but he’s doing it on purpose,” alleged the video, which Trump posted on his Truth Social account.

The video’s narrator then falsely states, “And this is why Warren Buffett just said, ‘Trump is making the best economic moves he’s seen in over 50 years.’”

The president shared a link to an X post from the account @AmericaPapaBear, a self-described “Trumper to the end.” The X post itself appears to be a repost of a weeks-old TikTok video from user @wnnsa11. The video has been shared more than 2,000 times on Truth Social and nearly 10,000 times on X.

Buffett, 94, didn’t single out any specific posts, but his conglomerate Berkshire Hathaway outright rejected all comments claimed to be made by him.

“There are reports currently circulating on social media (including Twitter, Facebook and Tik Tok) regarding comments allegedly made by Warren E. Buffett. All such reports are false,” the company said in a statement Friday.

CNBC’s Becky Quick spoke to Buffett Friday about this statement and he said he wanted to knock down misinformation in an age where false rumors can be blasted around instantaneously. Buffett told Quick that he won’t make any commentary related to the markets, the economy or tariffs between now and Berkshire’s annual meeting on May 3.

While Buffett hasn’t spoken about this week’s imposition of sweeping tariffs from the Trump administration, his view on such things has pretty much always been negative. Just in March, the Berkshire CEO and chairman called tariffs “an act of war, to some degree.”

“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” Buffett said in the news interview with a laugh. “And then what? You always have to ask that question in economics. You always say, ‘And then what?’”

During Trump’s first term, Buffett opined at length in 2018 and 2019 about the trade conflicts that erupted, warning that the Republican’s aggressive moves could cause negative consequences globally.

“If we actually have a trade war, it will be bad for the whole world … everything intersects in the world,” Buffett said in a CNBC interview in 2019. “A world that adjusts to something very close to free trade … more people will live better than in a world with significant tariffs and shifting tariffs over time.”

Buffett has been in a defensive mode over the past year as he rapidly dumped stocks and raised a record amount of cash exceeding $300 billion. His conglomerate has a big U.S. focus and has large businesses in insurance, railroads, manufacturing, energy and retail.

This post appeared first on NBC NEWS

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In Politics

Kevin Hassett doubles down on Trump tariffs, says dozens of countries are asking to negotiate

2 Mins Read

White House Economic Council Director Kevin Hassett doubled down on the effectiveness of President Donald Trump’s tariffs on Sunday, saying dozens of countries are now seeking to open negotiations and U.S. manufacturing is booming.

Hassett made the claim during an appearance on ABC News’ ‘This Week’ with host George Stephanopoulos. He said that over 50 countries have already said they want to negotiate new trade agreements with Trump’s administration since the tariffs hit last week, though he acknowledged there may be short-term pain for consumers.

He pointed to the decrease in prices that has existed since China entered the World Trade Organization in 2000, arguing that the loss of jobs outweighs the low prices.

‘If cheap goods were the answer, if cheap goods were going to make Americans’ real wages better off, then real incomes would have gone up over that time. Instead, they went down because wages went down more than prices went down. So we got the cheap goods at the grocery store, but then we had fewer jobs,’ he said.

Hassett added that he has received ‘anecdotal word’ that some U.S. auto plants are adding second shifts to their work schedules in response to the tariffs.

Stephanopoulos then pressed Hassett to explain why Russia wasn’t targeted with any additional tariffs.

‘There’s obviously an ongoing negotiation with Russia and Ukraine, and I think the president made the decision not to conflate the two issues. It doesn’t mean that Russia in the fullness of time, is going to be treated wildly different than every other country,’ Hassett responded.

‘But Russia’s one of the only countries, one of few countries that is not subject to these new tariffs, aren’t they?’ Stephanopoulos pressed.

‘They’re in the middle of a negotiation, George, aren’t they?’ Hassett countered. ‘Would you literally advise that you go in and put a whole bunch of new things on the table in the middle of a negotiation that affects so many American and Ukrainian and Russian lives?’

‘Negotiators do that all the time,’ Stephanopoulos argued.

‘Russia is in the midst of negotiations over peace that affects really thousands and thousands of lives of people and that’s what President Trump’s focused on right now,’ Hassett said.

This post appeared first on FOX NEWS

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