Before the bell: investors hope for a reasonable Trump

European stocks (+6.6%) versus American stocks (+3.7%). Is Trump a blessing for Europe? The top 10 European blue-chip stocks of the year so far.

Stocks in the eurozone (Euro Stoxx 50) are already up 6.6% in early 2025, while American stocks via the S&P 500 are up 3.7%. The year started hesitantly as investors were cautious about Trump’s official return as president. After nearly a week in the White House, the most notable takeaway is that there have (so far) been no import tariffs on European and Chinese goods, despite his day-one promise. This has given investors hope that a trade war with price increases and corresponding inflation might be avoided, allowing interest rates to stay low. It’s too early to declare victory, but investors are always ahead of the curve and tend to assume the most likely scenario. Right now, they’re wearing rose-colored glasses. Last night’s announcement of 25% tariffs on Colombia gave markets a brief scare, but this morning, the country showed willingness to accept deported citizens from the U.S., calming nerves.

In China, industrial activity slowed this month according to new data, yet Hong Kong opened with a 0.7% gain. In the U.S., the Federal Reserve is expected to hold rates steady during Wednesday’s meeting. At 10:30 AM, the ifo Business Climate Index will reveal German business confidence. Ryanair lowered its forecast for the new fiscal year starting April 1. In the U.S., AT&T will report earnings before the market opens. The earnings season on Wall Street will ramp up significantly in the coming days.

Oil prices refuse to sink (yet)

Another highlight last week was Trump’s call for increased oil production to bring prices down. He argued that this would pressure Putin into making concessions on Ukraine while also helping to curb inflation. However, we’re not there yet. OPEC countries have remained unusually disciplined with their output in recent years, preventing sluggish economies in China and Europe from dragging oil prices down. Sanctions and war are also disrupting production in Russia, Iran, and Venezuela. Trump is urging the U.S. to ramp up production. Experts believe oil prices will hover between 65 and 85 dollar per barrel. Currently, prices fluctuate between 74 and 78 dollar.

Is Trump really a blessing for Europe?

Stock markets in the eurozone are on track to deliver twice the returns of Wall Street in January. Is Trump as U.S. president truly a blessing for Europe? That’s the opinion of Ilham Kadri, CEO of Syensqo. Her sentiment reflects the current mood among many European businesses and entrepreneurs. Europe is stagnating, overly regulated, and does too little to support its own enterprises. But with Trump putting America first, European policymakers might be forced to adopt more business-friendly measures. Former ECB president Mario Draghi’s blueprint for Europe’s economy has been ready for some time. While its implementation will take time, markets tend to move ahead in anticipation. European stocks are currently very cheap, making them attractive. Below is a list of standout European stocks from the Euro Stoxx 50, ranked by their performance so far this year. These top companies could do even better if Europe enhances its competitiveness. Surprisingly, banks dominate the list, alongside IT, electrification, chemicals, and aircraft engines.

The 10 best-performing European blue-chip stocks so far this year

• LVMH (French luxury group): +15.5%
• BBVA (Spanish bank): +13.4%
• Unicredit (Italian bank): +13.6%
• Schneider Electric (French electrical equipment): +12.3%
• SAP (German IT): +11.5%
• Safran (French aircraft engines): +11.5%
• BASF (German chemicals): +10.7%
• Siemens (German conglomerate): +10.6%
• Nordea Bank (Norwegian bank): +10.4%
• Banco Santander (Spanish bank): +9.4%

Did you know…

January has only once in the past 25 years seen more money flow into European equity funds than this year? And the month isn’t over yet.

This article was translated from Dutch and was originally published on Spaarvarkens.be.