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European indices are largely up today despite Donald Trump moving decisively yesterday on new trade policies widely being interpreted as protectionist. The DAX 30 is currently up 0.25%. The three major U.S. benchmark indices fell to modest losses on Monday as Trump withdrew from the Tran-Pacific Partnership, a bilateral trade agreement between 11 Pacific Rim nations including Japan and Australia agreed by the Obama administration but not yet ratified in Congress. He also stated the intention to renegotiate the NAFTA agreement between the U.S., Canada and Mexico. During his campaign he said he would like to scrap it completely and yesterday threatened full withdrawal if he doesn’t get what he wants during renegotiations. And, finally, he announced his intention to place a significant border tax on goods imported into the U.S.
The U.S. dollar fell as the announcements were made but has since rebounded slightly. Asian indices, excepting the Nikkei 225 which suffered on a stronger yen, finished with gains earlier today and European indices opened slightly up after 3 consecutive days of losses. There was a dip immediately after the open as Markit’s flash composite PMI reading showed a slight drop in January business activity in the Eurozone. The combined manufacturing and services PMI saw a slight decline to a 54.3 reading from December’s 54.4 result.
The index quickly bounced back though and has been on an upwards trajectory since 10:00 am. Corporate software solutions giant SAP posted Q4 results this morning which showed an improvement in Q4 profits and revenues compared to last year. The company also raised its outlook for fiscal years 2017 and 2020. Non-IFRS operating profit for 2017 is expected to come in at 6.8 to 7 billion euro, compared to 6.63 billion euros for 2016. 8.5 to 9 billion euros is expected for 2020. SAP is up by a marginal 0.12% at the time of writing.
Siemens is having a good session on the DAX with a 1.32% gain while Deutsche Bank and Commerzbank are up 1.32% and 0.52% respectively. Adidas is up just over 1%.
Lufthansa and insurer Allianz have seen the day’s biggest losses so far today, down 1.14% and 1.21% respectively.
