• Mega debt causes concern

US President Trump first caused excitement and outrage with the bombing of nuclear facilities, but then, after the ceasefire, he also received much praise from Western allies. However, it is not yet entirely clear whether the nuclear facilities in Iran have really been completely destroyed. He also managed to push through his demands at the NATO summit in Brussels. Now the important tariff negotiations with the EU are coming up. Trump will continue to provide summer theatre in the coming months. A meeting with Putin in Istanbul is not out of the question, but it must be well prepared. Despite increasing debt risks, investors remain calm so far. New highs are even possible in the near future.

The stock markets in Eastern Europe also continue to perform well, with five Eastern European stock exchanges even outperforming the DAX. Since the beginning of the year, the UTX index for Ukrainian equities has risen by 64%, the SBI index for Slovenia by 32%, the PTX index for Polish equities by 31%, the CTX index for Czech equities by 24% and the HTX index for Hungarian equities by 23% since the beginning of the year, all of which clearly outperformed the DAX, which rose by 20% in euro terms. However, the SETX index for shares from South-Eastern Europe also outperformed the DAX slightly at the beginning of the year with a gain of 23%, as did the CECE index, which includes Poland, Hungary and the Czech Republic, with a gain of 27%. Bulgaria will be the next country from Eastern Europe to join the eurozone next year.

It is therefore still worth keeping an eye on Eastern Europe, including countries such as Georgia and Kazakhstan. Andreas Männicke also gives his assessment of the new opportunities in Eastern Europe in his stock market newsletter EAST STOCK TRENDS (www.eaststock.de) and in his new EastStockTV video, episode 252, but now also in the new BRICS TV, episode 2, at www.YouTube.com.

Is the Iran war really over now…

Trump caused a great deal of excitement with the bombing of nuclear facilities in Iran, and some believed that World War III was not far off. This could have happened if China and Russia had intervened militarily. But since Iran responded only symbolically with missile strikes on two US bases in the Arab world and was quickly willing to agree to a ceasefire, the war of aggression, which was originally started unilaterally by Israel in violation of international law, ended after only 12 days. The price of Brent crude oil rose sharply to 76 USD/barrel, but has now fallen back to 67 USD/barrel. Fortunately, the Strait of Hormuz was not closed by Iran, otherwise the oil price would have exploded.

… and have the Iranian nuclear facilities really been destroyed?

The question now is whether the nuclear facilities in Iran have really been destroyed to such an extent that Iran will be unable to build a nuclear bomb for decades, which was and remains Trump’s stated goal. Perhaps Iran or its allies will retaliate later. However, some experts from the United States and some US media outlets such as CNN and the New York Times claim that Iran will be able to enrich uranium again after just a few months, especially since the uranium was allegedly moved aside in time. Iran now no longer wants to be monitored by the International Atomic Energy Agency (IAEA), which makes it easier for Iran to continue its research underground. Iran has always denied that it wants to build a nuclear bomb, and this has not yet been proven. Trump now wants to negotiate with Iran and ensure that Iran is only allowed to use uranium for peaceful purposes and that the possibility of a nuclear bomb is ruled out.

However, Trump dismissed these arguments that the nuclear facilities have not been completely destroyed as ‘fake news’ at the press conference at the NATO summit. On 6-7 July, the eagerly awaited BRICS summit will take place in Brazil, where the war in Ukraine will certainly be discussed, as will the war in Iran and its geopolitical consequences. Trump will undoubtedly be sharply criticised there. It is unlikely that a new BRICS currency will be discussed, even if it is being prepared in secret.

Trump scores points with NATO

At the NATO summit in Brussels, everyone seemed to be following Trump’s lead and focusing on him. This was understandable, especially as there were fears that the US wanted to break away from NATO and leave the alliance. The EU and other NATO partners panicked and even agreed to Trump’s proposal to allocate 5% of GDP to defence spending. This is now actually to be set as a target for 2035, which is madness. Some politicians want to switch the German economy to a ‘war economy’ right now.

The threat from Russia was cited as the reason, even though Putin has always denied ever wanting to wage a war of aggression against NATO. Even the war in Ukraine has a long history, in which both the US and the EU have made mistakes. Although it was previously a proxy war between the US and Russia, from Russia’s point of view, under Trump, the new enemy now seems to be the EU, which is too focused on confrontation with Russia instead of following Trump’s plans to end the war in Ukraine and then resume economic cooperation with Russia. If Merz now sends Taurus missiles to Ukraine, the potential for escalation would be enormous. Germany would then finally be regarded as a warring party by Russia and become a target for Russia.

A new policy of détente is the order of the day

A new policy of détente modelled on Willy Brandt is now the order of the day instead of just fuelling the war with more weapons. In particular, sending Taurus missiles to Ukraine would only add fuel to the fire, but would not significantly change the course of the war. Putin is continuing to try to create a buffer zone in northern Ukraine with the cities of Sumy and Kharkiv in order to improve his negotiating position. However, Putin is willing to talk to Merz.

The consequences of the arms build-up are predictable

Unfortunately, there are not enough politicians in Germany who agree with the manifesto of the left wing of the SPD under Müntefering/Stegner and who are committed to diplomacy instead of weapons and excessive armament, which will cause the people to suffer because money will then be lacking in other areas. The Merz bazooka was already a mistake and a deception of the voters, especially CDU voters. No one knows how the mountains of debt that have now been piled up can ever be paid off. The federal government would have to generate gigantic growth of 5% to justify such mountains of debt. But France is also heavily indebted. I expect a wave of protests in France in the summer. The next generation will be the ones who suffer, perhaps not receiving any pensions at all or only receiving them from the age of 80. Indirect and direct expropriation processes will then increase and prosperity will suffer as a result.

James Bond is more active than ever

The war in Ukraine, which violates international law, could have been avoided back then if Russia’s security interests had been taken into account more and if there had been more dialogue with Putin. At the NATO summit, Trump hinted that he would soon be talking to Putin to bring about a ceasefire there, which has not yet been achieved. It is possible and desirable that a meeting between Trump, Selinskyi and Putin will take place in Istanbul this summer, where Erdogan can then act as mediator, as he did in April 2022, when the almost finalised peace plan could not be implemented due to the negative stance of British Prime Minister Boris Johnson and US President Joe Biden. Strangely enough, the talks were not continued at that time due to the still not fully clarified atrocities in Buchma.

Now, the coup by the Ukrainian secret service called ‘Spider’s Web’ and the destruction of at least 10 Russian nuclear bombers has thwarted further peace negotiations, again just one day before the decisive negotiations. Was this déjà vu experience a coincidence? Putin holds the British and American secret services jointly responsible for the destruction of the Russian nuclear bombers, for the terrorist act against the four trains and for the partial destruction of the Crimean bridge. Putin now describes Ukraine as a place of terror because civilian facilities have deliberately been targeted. James Bond is certainly more active than ever and is influencing the course of the war and the negotiations.

No sanctions against Russia at the EU summit

No new sanctions against Russia were imposed at the EU summit because Hungary and Slovakia opposed them. The question is whether Elon Musk will continue to provide Starlink to Ukraine for reconnaissance purposes. Selinskyi is not very popular with the current US administration. However, Selinskyi wants the US to build a drone factory in Ukraine, which Germany already wants to do. One gets the impression that the US will soon no longer be Russia’s main enemy, but rather the EU.

The German government’s new budget plan sets new priorities

Previously, the NATO target was only 2% of GDP, which Germany had hardly met in previous years. For Germany, this would mean that the defence budget would rise from the current €41 billion to around €200 billion. This, in turn, would be almost half of the current budget expenditure of just over €500 billion. Spain does not want to go along with this and is now even threatening to leave NATO.

The new budget for 2025, which has already been decided by the Federal Cabinet but still has to be approved by the Bundesrat, increases the defence budget from €41 billion to €62 billion. New borrowing is to amount to €81 billion. The additional spending on infrastructure and defence is to be offset by savings elsewhere. But Trump also wants to drive up debt, although his budget proposal has been heavily criticised by Elon Musk because it could lead to national bankruptcy, even in a recession. There is already a flight from the US dollar, and the interest burden on the government is becoming increasingly expensive with yields on US government bonds above 4.5%. Trump therefore wants the Fed chairman to cut interest rates by at least 1 percentage point. Trump is constantly threatening to fire Powell, although this cannot happen until next year.

The stock markets initially welcome the new mega debt and remain in a bullish mood

However, the stock markets have so far reacted positively to the planned debt binge because more investment is now being made. In the US, some stocks such as Nvidia have already reached new all-time highs, and US indices such as the S&P Index and the NASDAQ Index are close to new all-time highs. Since Trump’s attempted mini-crash from 3 to 7 April, the US indices and almost all global stock markets have recovered in a V-shape, resulting in the best entry prices on 7 April. However, due to the weak US dollar, US indices are down in euro terms. Nvidia’s share price has risen by over 50% since its low in April. The other ‘six magical’ tech stocks have also risen sharply since April, despite high US yields and geopolitical conflicts.

Is too much future fantasy already priced in?

Valuations in the US remain very high, especially for meme stocks such as Palantir (P/E ratio 600), but also for Netflix (P/E ratio 60) and Tesla (P/E ratio 200). AI and quantum computers are the new technologies of the future that are now sparking so much speculation about the future of many tech stocks, including Tesla, but also robotics and self-driving cars. Cryptocurrencies such as Bitcoin (BTC) also remain in demand. However, Bitcoin and other cryptocurrencies have recently been trending sideways, as has gold.

Platinum goes through the roof

Among commodities, gold and silver have been particularly impressive this year, with platinum rising by over 30% as the most valuable precious metal. Gas prices have also risen sharply. However, copper also has potential as long as there is no recession. Those who want to take advantage of this should invest in the respective commodity ETCs from BNP Paribas. Palladium could also break out upwards in the near future. It will also be interesting to see whether Trump’s tariff policy develops inflationary tendencies and whether Powell will cut interest rates in the summer, as Trump is vehemently demanding.

Tariff negotiations with the EU as a yardstick

On Friday, the DAX was by far the best performing index not only in Europe but among all Western industrialised nations, with over 24,000 index points and a gain of 20% since the beginning of the year. Investors are even more willing to take risks again due to the new mega debt. It remains to be seen how long the positive mood will last, as Trump is sure to cause quite a stir over the summer. We are now eagerly awaiting the outcome of the tariff negotiations with the EU in the coming days, which are particularly important for Germany as an export-dependent country.

Eastern European stock markets may continue to outperform

As in the previous year, some stock markets in Eastern Europe once again outperformed the DAX. The UTX Index for shares from Ukraine has risen by 64% since the beginning of the year, the PTX Index for shares from Poland by 41%, the CTX Index for shares from the Czech Republic by 24%, the HTX Index for shares from Hungary by +23% and all clearly outperformed the DAX, which rose by 20% in euro terms. However, the SETX Index for shares from South-Eastern Europe also outperformed the DAX slightly at the beginning of the year with a gain of 23%, with the SBI Index for Slovenia alone rising by 30% – as did the CECE Index with Poland, Hungary and the Czech Republic on board with a gain of 27%. With Bulgaria, a new country from Eastern Europe will join the eurozone next year.

Get informed before you invest

Find out more now about the background and development of the Ukraine/Russia crisis, as well as the future recovery potential of undervalued stocks from Eastern Europe. There are also new opportunities in the Baltic States, South-Eastern Europe and the CIS republics (Kazakhstan, Georgia) there are new opportunities, with all the respective stock indices posting gains in 2023. In 2023, 12 stock exchanges from Eastern Europe were among the 30 best-performing stock markets in the world, with five clearly outperforming the DAX. In 2024, nine stock exchanges from Eastern Europe once again outperformed the market with strong gains. And since the beginning of the year, five stock exchanges from Eastern Europe have clearly outperformed the DAX. It is therefore still worth looking beyond your own backyard to Eastern Europe.
Order a trial subscription now (3 issues by email for only £15) to the monthly stock market newsletter EAST STOCK TRENDS (EST) with another Ukraine/Kazakhstan special and a dividend special, as well as lots of background information and new investment suggestions such as the ‘Stock of the Month’ and lucrative certificates at www.eaststock.de, under ‘Stock Market Newsletter’. The last EST was published on 28 March 2025.

TV/radio information: On 5 February 2024, Andreas Männicke was interviewed by Carola Ferstl on Money Talk about gold, commodities and new opportunities in Eastern Europe. On 3 June 2025, Andreas Männicke was interviewed by Heinrich Leben on Börsenradio Networks about new opportunities in Eastern Europe, particularly in Ukraine, following the end of the war. All radio and TV interviews can be downloaded from the video archive at www.eaststock.de, including the latest video on EastStockTV, episode 252. By the way: have you already subscribed to the new YouTube channel BRICS-TV in addition to the YouTube channel EastStockTV? Here is the link to the second BRICS-TV video: https://www.youtube.com/watch?v=_zN-qTv0xz4

Reading tip: The new issue of VTAD-News No. 42 features a detailed report by Andreas Männicke on the BRICS as a new investment opportunity. Here is the link to the article: https://www.vtad.de/wp-content/uploads/2024/11/vtad-news-42.pdf

Seminar note: If you are interested in new East Stock Exchange seminars ‘Go East’ or a BRICS seminar in Frankfurt/M or other cities, please contact the EST editorial team (www.eaststock.de). If you are interested in East Stock Exchange webinars and BRICS webinars, please also get in touch.

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