"DAX is currently thriving with immense excitement, as the highly anticipated week takes center stage"
The U.S. presidential election is shaping up to be a significant event for the global stock market, particularly for the German DAX index and its constituent stocks like Porsche, Siemens Energy, and Rheinmetal.
In the DAX today, there are no significant price movements, with the exception of Siemens Energy. The energy technology manufacturer has seen its price more than triple since the beginning of the year, reaching another record high.
Meanwhile, the stocks of Porsche and Rheinmetall are currently in focus. Porsche's stocks are leading the German benchmark index with a gain of 2.6 percent, while Rheinmetall is at the bottom with a loss of 2.8 percent. The DAX itself is down 0.3 percent and stands at 19,192 points, while the European equivalent, Euro Stoxx 50, is also down 0.3 percent, standing at 4,865 points.
The upcoming U.S. presidential election is described as "probably the most exciting week of the year for the stock market" by market strategist Jürgen Molnar from the trading house Robomarkets. The question of whether a woman will move into the White House for the first time or if Donald Trump will win a second term is captivating and electrifying investors.
The impact of the U.S. election on Germany's DAX, particularly focusing on Porsche, Siemens Energy, and Rheinmetall, centers primarily on trade policy changes and their effects on these companies' export-dependent sectors. The recent EU-US trade deal imposes a 15% tariff on many goods entering the U.S., providing partial relief compared to previous higher tariffs (e.g., automotive tariffs near 27%) but still presents challenges, especially for Germany’s export-driven economy.
Siemens Energy and Rheinmetall, active in the industrial machinery and defense sectors respectively, face similar uncertainties due to tariffs and unresolved trade terms, particularly in steel and aluminum—and broader geopolitical tensions fueled by U.S. policy shifts post-election could further complicate export dynamics. The strengthening euro against the dollar also diminishes competitiveness for German exporters in the U.S.
Beyond tariffs, the full Republican control in the U.S. following the election suggests likely policy shifts such as deregulation and possible changes in tariffs or fiscal policy that may cause short-term trade uncertainty but could also ease financial conditions, potentially benefiting equities including those in the DAX. However, trade policy uncertainty tends to depress earnings forecasts and create volatility, with analysts estimating that a 5-percentage-point tariff increase could reduce earnings growth by 1-2 percentage points, which would weigh on export-oriented firms like Porsche, Siemens Energy, and Rheinmetall.
In summary, the U.S. election’s impact on the DAX and the mentioned stocks is a mix of cautious optimism due to tariff relief and financial market stability, tempered by ongoing trade policy uncertainty and currency-related competitiveness challenges. Market reactions will likely remain sensitive to ongoing trade negotiations and geopolitical developments in the near term.
[1] [Source 1] [2] [Source 2] [3] [Source 3] [4] [Source 4]
Financial analysts are keeping a close eye on the upcoming U.S. presidential election, as it could significantly impact the financial performance of export-dependent companies in the German DAX, such as Porsche, Siemens Energy, and Rheinmetall. Changes in trade policy could affect these companies' export-oriented sectors, especially with the potential for tariff increases leading to reduced earnings growth by 1-2 percentage points (Source 4).
