Political risk is in Europe, not in the US
The three-year-old union between Scholz’s Social Democratic Party (SPD), the Greens and Lindner’s Free Democratic Party (FDP) had been on shaky ground for some time. Chancellor Olaf Scholz said he would call for a confidence vote on Jan. 15, raising the possibility of elections earlier than scheduled in March. Source: FT, CNBC
A double-whammy for Europe: tariffs on US exports + increased defence spending...
Source: The Economist
This is how Europe continues to do business with Russia - exporting through Kyrgystan (among others)
Source: Robin Brooks on X
UNEMPLOYMENT IN GERMANY SPIKED TO THE 2ND-HIGHEST IN 10 YEARS
The number of unemployed people in the world's 3rd largest economy has risen for 22 STRAIGHT MONTH. There are now 2.86 MILLION unemployed people in Germany, the most since the COVID CRISIS. Chart: Global Markets Investor, @AugurInfinity on X
One of the most important news today:
Volkswagen targets layoffs and 10% pay cuts amid plans for German plant closures, union says. Source: Bloomberg
European stocks are hit by a ‘Trump effect’ as odds tilt towards Republican win.
A basket of 22 European stocks exposed to US tariffs compiled by Goldman Sachs has tumbled 5% since late September as the former president’s odds of an election victory shorten. The basket, which includes Diageo, Porsche, Mercedes, Adidas or Moller Maersk is now down 11% this year, compared with an 8% rise for the broader European stock market and 22.5% for the S&P500. Source: HolgerZ, Bloomberg
Europe's most valuable companies
Source: companiesmarketcap.com
The benchmark German equity index Dax has hit a fresh ATH.
Since the start of the year, the index has risen by 17%. However, this growth is driven entirely by higher valuations. The Dax's price-to-earnings (P/E) ratio is nearly 15, and if you exclude the dirt-cheap car stocks, it jumps to 17. Source: Bloomberg, HolgerZ
