Weekly outlook: “Rapid return to highs unlikely”

Although the stock markets have recovered significantly from their lows, there's no real relief. Many important economic and corporate figures are due this week.

April 28, 2025. FRANKFURT (Frankfurt Stock Exchange). The markets remain under the spell of Trump's tariff policy. While the US negotiations with key trading partners such as China have triggered a strong recovery in the US and European stock markets, as Ulrich Kater of DekaBank notes, "The US administration's fundamental agenda of aligning the global economy more to the US's advantage remains intact."

Martin Zurek of Weber Bank is also skeptical: "The constant interplay of announcements, exceptions, and withdrawals is shaking the markets' confidence in the United States' economic policy reliability," he explains, also with a view to the weak US dollar. "It's no longer just about trade policy, but about confidence in the US's ability to lead the economy."

Zurek expects that – until there is more clarity about the future economic outlook – the stock markets will move sideways with significant volatility. He also anticipates a noticeable slowdown in earnings growth for many companies. "A rapid return to the previous highs on the stock markets therefore seems unlikely."

The DAX is at 22,342 points on Monday morning, down from 22,242 at the close of trading on Friday. The index has thus moved well above its monthly low of 18,489 points and is clearly up again this year, with over 11 percent. The Stoxx Europe 600 is up just under 2 percent. The US markets have also clearly recovered, but since the beginning of the year, the S&P 500 is still down 6 percent, and the Nasdaq 100 is down over 7 percent.

“Mood rather negative”

According to Thorsten Weinelt of Commerzbank, the news regarding tariffs will continue to keep the markets on edge. "However, the macroeconomic indicators due out this week should once again be a focus for investors," he says. Overall, sentiment remains rather negative. "However, the reporting season is going better than feared," he adds.

“Worries thanks to Trump’s tariffs”

Robert Halver of Baader Bank sees mixed signs so far regarding the reporting season. Overall, the major US banks could more than offset the sharp increase in loan loss provisions with significantly higher income from securities trading. "However, when it comes to the US economic outlook, Trump's tariffs are causing them concern." At least the valuation premium of tech companies compared to the overall US market has now shrunk to a more favorable level. Halver continues to see the German stock market at an advantage over the US, even in the second tier.

Extremely full schedule

This week's calendar is full of economic data releases. In addition, 91 companies from the Stoxx Europe 600 will present their first-quarter reports, including Deutsche Bank, Deutsche Börse, BP, HSBC, Deutsche Post, Mercedes-Benz, and Shell. From the US, 183 S&P 500 companies, including Exxon Mobil, Amazon, Apple, Microsoft, and Meta, will report, according to Deutsche Bank.

Important economic and business dates of the week

Wednesday, April 30

3:30 a.m. China: Purchasing Managers' Index April. DekaBank expects a significant decline in the manufacturing index, citing the increase in US tariffs at the beginning of April.

10:00 a.m. Germany: GDP 1st Quarter. According to DekaBank, German gross domestic product may have risen surprisingly sharply in the first quarter. This was due to advance purchases by US customers who wanted to stock up on goods at favorable conditions before the tariff increases.

11:00 a.m. Eurozone: GDP 1st quarter. For the eurozone, Commerzbank expects noticeable growth of 0.2 percent in the first quarter compared to the previous quarter. Spain's economy is expected to have once again experienced the strongest growth, it says.

2:00 p.m. Germany: Consumer prices April.

2:30 p.m. USA: GDP 1st Quarter. According to Commerzbank, the economy in the USA has likely stagnated. This represents a significant slowdown after years of average growth rates of almost 3 percent.

4:00 p.m. USA: Consumer Expenditure Price Index March.

Thursday, May 1

Labor Day. No trading on Deutsche Börse's marketplaces.

Japan: Bank of Japan interest rate decision. The Bank of Japan is likely to keep its feet on the ground, according to Commerzbank.

Friday, May 2

11:00 a.m. Eurozone: Consumer prices for April. According to DekaBank, the late Easter holiday has likely caused the usual seasonal price increases for many tourism services to be postponed until April. Following a decline in core inflation in the previous month, it therefore expects an increase to 2.6 percent. However, it forecasts a slight decline in overall inflation to 2.1 percent, partly due to falling energy prices.

2:30 p.m. USA: Unemployment figures for April. According to DekaBank, only a weak increase in employment is expected. The strong increase in March was due almost exclusively to a weather-related catch-up effect.

by Anna-Maria Borse, April 28, 2025, © Deutsche Börse AG