The Stoxx Europe 600 index, which tracks hundreds of companies in 17 European countries, has increased by 7.7% so far this year. The Dax index of Germany has increased more than 15%, and CAC 40 in Paris has increased around 9%. Throughout the Channel of La Mancha, the FTSE 100 in London has increased by 5.6%.
The S&P 500 based in the United States, on the contrary, has fallen more than 4.1% this year, and the Nasdaq compound has lost more than 8%.
The Revitalized Military Plans of NATO Allies have helped to boost the changes. Trump has repeatedly said that he wants allies in the coalition to increase their 5% defense expenditure of the gross domestic product of each Member State, much higher than the current minimum of 2% of NATO. United Kingdom
Prime Minister Keir Starmer said on February 25 that the country’s military disbursements would reach 2.7% by 2027 and eventually increase to 3%. On Friday, Great Britain presented an impulse of 2 billion pounds ($ 2.5 billion) in loans available for the United Kingdom’s defense companies to judge their exports to the allied military.
In Germany, the probable incoming chancellor, Freidrich Merz, reached an agreement with legislators on Friday to loosen the rules of the financial era of the country’s financial crisis on defense and security spending. The movement is intended to unlock up to 1 billion euros ($ 1.1 billion) to reinforce the defenses of the nation.
The French president, Emmanuel Macron, who has joined Starmer among the world leaders who mediate the conversations between Washington and kyiv, said this month that he planned to increase national security and defense spending from around 2% of GDP to 3.5%, an increase of 30 billion euros ($ 32.6 billion).
And the European Commission, the executive branch of the European Union, recently announced 150 billion euros ($ 163 billion) on loans to its 27 member states, insured by EU budgetary funds. He also established plans to loosen the strict fiscal rules in the Member States to release 650 billion additional euros ($ 707 billion) destined for military expenses.
The burst of changes in policies in the United Kingdom and in the continent has caused defense actions in the region. The German tank manufacturer Rheinmetall has seen the price of its more than double shares so far this year. The actions of the aerospace and manufacturer of French missiles Thales have jumped more than 70%, the defense giant of the United Kingdom Bae Systems, which develops combat vehicles, naval ships and cyber defense systems, increases almost 40%and the manufacturer of French combat aircraft Dassault has increased by 15%during the same period.
What we underestimated was how the emptiness of the United States for NATO and Ukraine would trigger a decisive moment for the Eurozone.
Alastair Pinder, Global Capital Strategist, HSBC
Some of these movements have taken analysts by surprise.
“Before the US elections, we assume that a Trump victory would reinforce the exceptionalism of the United States,” wrote the HSBC Global Alastair Pinderr in a note to customers on Monday. “What we underestimated was how the emptiness of the United States for NATO and Ukraine would trigger a decisive moment for the Eurozone, and Germany is expected to continue with a considerable fiscal stimulus.”
The Bank based in London, the largest in the region, reduced the US markets of “overweight” neutral “on Monday, becoming the first of the two main global banks to do so this year.
Despite promising in the campaign to “end inflation and make the United States be affordable again” on their first day in office, Trump and the main allies have begun to insinuate the economic pain that is coming for consumers. And after for a long time citing the stock markets such as a successful barometer and promising that the conditions on Wall Street would be “excellent” if the voters return it to the position, Trump has minimized the recent liquidations. “You really can’t see the stock market,” he said on Sunday.
A White House spokesman did not respond to a request for comments. The senior administration officials have run to assure Americans this week that their policies are working.
“We are focused on the real economy: can we create an environment where there is long -term gains in the market and long -term profits for the American people?” The Treasury Secretary Scott Besent, said Thursday CNBC on Thursday. “I am not worried about volatility for three weeks.”
Meanwhile, Trump’s efforts to dismantle large parts of the federal government have also driven European authorities to consider their own bureaucracy.
Facing a “wind of deregulation” that blows through the Atlantic, European officials “will be very careful to maintain a competitive level play field”, the governor of the Bank of France promised shortly after Trump’s victory. At the end of February, the European Commission proposed a package of “simplification measures” that said it would benefit both citizens and business. The largest party of the European Parliament has asked legislators to accelerate their approval.
