FRANKFURT (dpa-AFX) - In the new trading week, investors are looking skeptically at the last days of Joe Biden as U.S. President. "Factors such as inflation, tariffs and geopolitical tensions repeatedly caused unrest," wrote portfolio manager Martin Zurek of Weberbank. "Uncertainty about the future monetary policy of central banks remains a key risk factor and is likely to continue to keep the markets in motion," he added. "Volatility in the financial markets will increase," the experts at Bank J. Safra Sarasin also believe.
"Although the year got off to a good start, investor sentiment has deteriorated," said the experts at LBBW, drawing an initial conclusion from the still young stock market year 2025. Speculation surrounding the tariff policy of US President-elect Donald Trump had already influenced investor sentiment in recent days, and this is likely to remain the case in the days to come. According to Zurek, Trump's unpredictable trade policy will influence the leeway for monetary policy.
Before Trump returns to the White House on Monday, January 20, speculation about his first official acts is likely to continue in the coming days. From his first term in office, the realization remains that they will not be long in coming. "The economic policy of the US president-elect, characterized by tariffs and tax cuts, could boost growth in the US, but carries the risk of accelerating inflation," said Weberbank expert Zurek.
In Trump's last term in office from 2017 to 2021, the stock markets had performed well: the Dax had gained more than 2000 points during this time, although the coronavirus pandemic had caused a temporary slump. US stock markets had also risen significantly. Whether this can be repeated is debatable.
"The new administration will inherit an economy that is very different from the one Trump built during his first term," said J. Safra Sarasin. The financial markets would probably be less tolerant this time around of measures that could drive up inflation and budget deficits. According to DekaBank's chief economist, Ulrich Kater, market participants are increasingly tired of Trump's communication style. He believes that his credibility on the capital markets could suffer as a result.
As for the leeway of the major central banks for further interest rate cuts, which investors are hoping for, there will be important economic indicators in the coming days, after Friday's jobs report painted a strong picture for the U.S. economy. These include the consumer price index and retail sales, which are on the agenda in the US on Wednesday and Thursday. "Overall, a clear easing of US inflation is unlikely to materialize," commented Thorsten Weinelt of Commerzbank. But inflation figures will also be among the data highlights in Europe during the week.
On the corporate side, the U.S. reporting season is set to begin. On Wednesday, JPMorgan, Wells Fargo, Goldman Sachs and Citigroup will once again be the big banks to do so. Bank of America and Morgan Stanley will round off the weekly agenda the following day. For the international chip sector, TSMC's results from Taiwan could also be significant on Thursday. The group has already presented sales figures.
If Commerzbank investment strategist Weinelt has his way, the reporting season could become the most important trend-setter before Trump returns in the new week. He expects tailwinds from the upcoming corporate reports. "We expect the US earnings season to set a positive tone in the coming weeks, as the US economy has continued to perform very robustly."
Weinelt is somewhat more skeptical about Europe, where the season is only just getting underway. In his opinion, 2025 is shaping up to be similar to the previous year. "Corporate earnings in Europe are likely to grow at a significantly slower rate than in the US, so we expect European equities to underperform again," said Weinelt./tih/ajx/he
--- By Timo Hausdorf, dpa-AFX ---