DAX: After record high – Bayer under pressure because of glyphosate problem!

DAX: After record high – Bayer under pressure because of glyphosate problem!

The DAX is taking a break on today's trading day after closing at a new closing record of 23,695.59 points on Friday, May 16, 2025. With a gain of 0.72 percent the day before, the positive development of the German stock market is particularly reflected after the agreement in the tariff dispute between the USA and China, which brought the DAX to a high of 23,911.98 points on Monday. This positive market development has increased the annual gain of the DAX to an impressive 20 percent. However, the index was stable this week and increased by 0.8 percent overall. The current trading week is also characterized by the upcoming options expiry on the futures exchange, which takes place regularly on the third Friday of the month.

In addition, the chemical company Bayer is moving into the focus of investors. He is currently facing a report from the Wall Street Journal that says the company is considering a legal process known as “Texas Two Step.” This strategy could help resolve glyphosate damages claims over Monsanto's bankruptcy. However, the legal hurdles for such a procedure are considerable and no US company has ever been successful in comparable situations. Neither Bayer nor the responsible authorities wanted to comment on the information from the “WSJ”. However, speculation about this legal move is not brand new; Bloomberg reported on this as early as spring 2024.

Economic outlook and market sentiment

While the DAX is showing positive developments, economists are showing optimism about the German economic outlook. They expect the ZEW barometer to rise to plus 13.7 points in May, after a decline to minus 14.0 points in April. Market reactions to the US-China trade conflict have been notable; The DAX performs far better than many other indices in times of escalation.

In addition, a stable trend is expected in US inflation, which is expected to be 2.4 percent in April, a continuation of the March level. The US Federal Reserve has also paused interest rates and is unlikely to cut interest rates next month. These factors noticeably influence the mood on the markets.

Bayer's business challenges

The Bayer Group also faces challenges in its financial situation. Analysts forecast a decline in adjusted operating profit (Ebitda) for the first quarter to 3.75 billion euros, compared to 4.41 billion euros in the previous year. CEO Bill Anderson emphasizes that 2025 will be a pivotal year for the company's turnaround, with operating profit falling to between 9.3 and 9.8 billion euros. Nevertheless, Bayer plans to significantly reduce the legal risks surrounding glyphosate by the end of 2026.

Overall, the DAX is taking a wait-and-see approach today as investors focus on developments surrounding Bayer and other economic indicators that could influence market activity.