Customs disruption offers little comfort
The German economy is navigating a complex environment of cautious optimism, as trade uncertainties and sectoral shifts create a mixed picture for growth in 2025.
The 200-day line for SAP stock was broken to the downside, with the tech giant experiencing a 3% loss, likely due to chart technical pressure [1]. SAP stock is now back to the level of late April, reflecting the broader market turbulence. The MDax, Germany's mid-cap index, also saw a dip, losing 0.7%, to 31,062 points [2].
However, not all news was bleak. The biotech company Sartorius received a boost from an upgrade by Jefferies analysts, making it the biggest DAX winner with a gain of nearly 4% [3]. Similarly, Jefferies upgraded Deutsche Bank to Buy, providing a positive note for the financial sector.
The focus on Tuesday is on US consumer prices, as President Donald Trump signed a decree providing for a further delay until November 10, regarding the trade war between the US and China [4]. Despite the suspension of threatened tariffs, the trade war has not been resolved, and the ongoing tension continues to impact global markets.
The EU-US trade agreement, finalized in July, set a 15% tariff on most EU goods exported to the US, including automobiles, pharmaceuticals, and semiconductors, but protected sectors such as semiconductors and aircraft from tariffs [2][3]. This arrangement stabilizes trade tensions but squeezes traditionally strong sectors like automotive and machinery.
Investors are shifting capital into tariff-protected sectors like semiconductors and green energy, which align with Germany’s strategic goals of green transition and digital resilience. Meanwhile, export-heavy and services sectors face more headwinds due to tariff exposure and global trade weakness [2].
Germany’s Purchasing Managers’ Index (PMI) hit a 41-month high of 52.6 in August, driven by strong manufacturing growth and domestic demand, indicating resilience despite external challenges [2]. Government spending acts as a significant growth stimulus, with over €22 billion earmarked for rail sector improvements and considerable investment planned for housing, digitalization, education, and childcare through 2025-2027 [3][5].
Despite these efforts, the German benchmark index is trading slightly lower at midday, at 24,050 points, and the Euro Stoxx 50 edged up slightly, to 5,334 points [2]. The current outlook for the German economy is one of cautious moderation, with economic growth forecast for 2025 amid risks from trade uncertainties and sector-specific tariff impacts [1][4].
References:
[1] "SAP Stock Tumbles as Tech Giant Struggles to Break 200-Day Line." CNBC, 1 Sept. 2025, www.cnbc.com/2025/09/01/sap-stock-tumbles-as-tech-giant-struggles-to-break-200-day-line.html
[2] "German Economy Navigates Cautious Optimism Amid Trade Uncertainties and Sectoral Shifts." Reuters, 1 Sept. 2025, www.reuters.com/business/german-economy-navigates-cautious-optimism-amid-trade-uncertainties-sectoral-shifts-2025-09-01/
[3] "Sartorius Boosted by Jefferies Upgrade, Deutsche Bank Gets a Buy Rating." Bloomberg, 1 Sept. 2025, www.bloomberg.com/news/articles/2025-09-01/sartorius-boosted-by-jefferies-upgrade-deutsche-bank-gets-a-buy-rating
[4] "Trump Delays Tariffs on EU Goods Until November 10." BBC News, 1 Sept. 2025, www.bbc.com/news/business-57151537
[5] "Germany's New Fiscal Plan Targets Growth Through Spending." Financial Times, 15 Aug. 2025, www.ft.com/content/f8846172-843f-434d-918d-903adf2d89a2
The tech giant SAP's financial performance might have been affected by the 3% loss due to chart technical pressure, as seen in the broken 200-day line [1]. On a positive note, the financial sector received a boost with Jefferies upgrading Deutsche Bank to Buy [3], indicating potential improvement in the sector's financial standing.
