30 AM, a 0..5 percent decrease from the previous day’s closing.
Jochen Stanzl, Chief Market Analyst at CMC Markets, noted a discernible decrease in investor interest in purchasing stocks at the 24,000 DAX mark. “The market is currently experiencing a summer slowdown. While there is anticipation regarding news concerning trade with the US, if resistance forms below this round number in the coming hours and days and if positive developments in the trade conflict fail to materialize, initial significant selling pressure could emerge.
Investors had been hoping for renewed momentum towards a record high. Stanzl commented that this was a “risky speculation, given the seasonal tendency for weaker performance. If the rally does not materialize, disappointment will follow.
Meanwhile, President Trump’s spending package successfully passed through the House of Representatives. The legislation includes tax cuts primarily for large corporations and the wealthy, intended to be offset by substantial reductions in healthcare spending. Despite these measures, the nation is projected to accrue new record debt, a portion of which will be allocated to bolstering police and customs authorities, including the ICE.
Stanzl stated that “the debt ceiling is unlikely to be a concern for several years, nor is there a fear of the shutdown of entire government agencies. This is positive for stocks and enhances planning certainty. However, the fact that the law was passed with a purely accounting maneuver and by a narrow majority is cause for concern.
The article explained that under the reconciliation process rules, a law cannot increase the deficit beyond a specific timeframe. However, by mathematically setting the largest component of Trump’s first administration’s tax cuts to zero, lawmakers created room for other tax relief and a higher debt ceiling.
“Instead of a $3.4 trillion deficit, this approach calculates a savings of $400 million. This practice is detrimental to investor confidence in US Treasury bonds. If the budgetary planning can be manipulated based on political expediency, the credibility of the budget planning diminishes. This is likely the reason for the significant jump in bond yields observed before today’s holiday” Stanzl added.
In currency markets, the euro showed slight strength on Friday morning, trading at $1.1779, with one US dollar equivalent to 0.8490 euros.
