The military escalation between the USA, Israel and Iran is causing strong market movements worldwide. Investors are shifting out of cyclical sectors and into security, energy and defense.

_________________________

Bitcoin $BTC (-2,78%) shows surprising stability

• 📈 In the meantime +8,1 %
• 💰 Just over 70,000 dollars
• Stabilization at around 69,000 dollars

Despite geopolitical risks, Bitcoin is apparently being used as a liquidity parking lot in the short term. At the same time, volatility remains high - further escalations could trigger new spikes.

_________________________

🛢 Oil prices up significantly

• Brent: + just under 6 %
• WTI: + a good 5 %
• In the meantime even +13 %

According to the report, the USA is currently no release from the strategic oil reserve. The market is still considered to be supplied, but the situation remains tense.

_________________________

🏦 Banks under pressure

The European banking index loses around 3,5 % - sharpest decline since April 2025.

Particularly affected:

• HSBC - $HSBA (-4,45%)
• Barclays - $BARC (-3,35%)
• Standard Chartered - $STAN (-2,25%)
• Deutsche Bank - $DBK (-5,25%)
• BNP Paribas - $BNP (-5,19%)
• BBVA - $BBVA (-4,08%)
• Commerzbank - $CBK (-4,6%)

In the USA also weaker until the US opening:

• Bank of America - $BAC (-1,03%)
• Citigroup - $C (-2,06%)

Reason: Strong Middle East business of many institutions and general risk aversion of investors.

_________________________

✈️ Travel industry collapses

High oil prices and uncertainty weigh heavily on tourism stocks:

• TUI - $TUI1 (-5,51%) (-11 %)
• Lufthansa - $LHA (-4,8%) (-11 %)

Flights to the region are canceled, travel offers suspended. Investors fear rising costs and falling booking figures.

_________________________

💎 Luxury stocks clearly in the red

The European luxury index loses almost 4 %.

Strongly affected:

• Richemont - $CFR (-3,92%)
• Swatch - $UHR (-3,25%)
• LVMH - $MC (-3,09%)
• Hermès - $RMS (-3,6%)
• Kering - $KER (-5,33%)
• Brunello Cucinelli - $BC (-6,06%)
• Moncler - $MONC (-5,96%)
• Ferragamo - $SFER (-4,89%)

Background:

Luxury is heavily dependent on global travel. Capital flows out of cyclical stocks.

_________________________

🛡 Defense stocks as clear winners

Geopolitical tensions drive up defense stocks:

• BAE Systems - $BA. (-1,77%)
• Lockheed Martin - $LMT (+1,98%)
• RTX - $RTX (+1,49%)
• Kratos - $KTOS (-1,88%)
• Hensoldt - $HAG (-1,81%)
• Leonardo - $LDO (-0,84%)
• Renk - $R3NK (-3,4%)
• Rheinmetall - $RHM (-3,06%)

Partial price increases of 3-6 %.

The focus is particularly on missile defense systems and possible increases in defense budgets.

_________________________

🚢 Shipping companies benefit

Transport values increase due to detour (avoidance of Hormuz, Suez Canal & Bab al-Mandab):

• Maersk - $MAERSK A (+0,18%)
• Hapag-Lloyd - $HLAG (-0,11%)
• Torm - $TRMD A (+0,42%)
• Frontline - $FRO (-6,5%)
• Hoegh Autoliners $HAUTO (+1,97%)

Reason: Shortage of transport capacity and speculation on rising freight rates.

_________________________

🥇 Gold in demand

• Gold price: +2,5 %

Profiteers in mining stocks:

• Evolution Mining - $EVN (-5,23%)
• Northern Star - $NST (-2,67%)

The sector has been showing relative strength for several days.

$4GLD (-1,52%)
$GOLD
$GOLD (-1,64%)

_________________________

📊 Market logic clearly recognizable

Winner:

🛡 Armaments

🚢 Shipping companies

🥇 Gold

₿ Bitcoin (short-term)

Losers:

🏦 Banks

✈️ Travel

💎 Luxury

_________________________

🔎 Conclusion

The market reaction follows the classic pattern of geopolitical crises:

• Risk is reduced
• Capital seeks security
• Energy prices rise
• Defense stocks benefit

The decisive factor remains whether the situation eases diplomatically - or escalates further.

_________________________

Source:

Reuters: Anleger greifen bei Bitcoin als "Fluchtvehikel" zu (Via TradingView)

2010 - VAT fraud / fraud with CO₂ certificates

2012 - VAT fraud / fraud with CO₂ certificates (continued)

2012 - Tax evasion / tax fraud

2015 - Cum-ex transactions / aiding and abetting tax evasion

2018 - Panama Papers / suspicion of money laundering (delayed suspicious activity reports)

2022 - Suspected money laundering (late reports, including Syria/Assad clan)

2022 - Greenwashing allegations (with affiliated DWS)

2026 - Suspicion of money laundering (delayed suspicious activity reports on Roman Abramovich's companies)

-14% the share fell in 16 years 📉 but +74% in one year 📈. Which bank shares do you have and how did they perform? $DBK (-5,25%)

Today the $DBK (-5,25%) presented its results for 2025 - and they show one of the strongest reporting periods in a long time. Analysts had expected a net profit of around €6 billion for the year as a whole, but the bank actually generated over €6.1 billion - its highest profit since 2007.

The results for the fourth quarter also exceeded forecasts:

Turnover (expected): approx. € 7.7 billion

Turnover (reported): approx. € 7.7 billion

Net profit (expected): € 1.12 bn

Net profit (reported): € 1.3 bn

In addition, the management has approved a share buyback program with a volume of €1 billion. Despite this strong balance sheet, the report is also overshadowed by the ongoing investigation into possible money laundering violations, which has temporarily weighed on the share price.

I am invested myself and am more than satisfied with the latest development - especially because the bank is operating much more profitably again.

What do you think of the $DBK (-5,25%) ?

https://www.investing.com/news/stock-market-news/deutsche-bank-posts-biggest-annual-profit-in-nearly-two-decades-a-day-after-police-search-4472046

$DBK (-5,25%) -headquarters in Frankfurt and a building in Berlin. Suspicion: money laundering

$RYA (-4,15%)
$UNH (-0,81%)
$GM (-1,1%)
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$AXP (-1,05%)
$XOM (+2,94%)
$CVX (+2,89%)

After more than 25 years of negotiations, the EU and the South American economic alliance Mercosur (Brazil, Argentina, Paraguay, Uruguay) have concluded a historic free trade agreement. This creates one of the largest free trade zones in the world - with over 700 million people and a combined economic area worth around 22 trillion USD.

This agreement could trigger global economic and stock market effects - for companies, industries and investors.

_________________________

🛃🚢 What will happen to the Mercosur agreement?

• Tariffs on up to 91% of EU exports and 92% of Mercosur exports are to be gradually eliminated.
• The aim is to create a larger single market, better market access, simplified rules and more stable trading conditions between Europe and South America.
• Until now, high tariffs have applied to cars (approx. 35%), machinery (14-20%) and chemical products (up to 18%).

_________________________

📊 Possible effects on the stock market

📈 1. industries with strong exports benefit from higher demand

Europe can sell its products more easily in South America:

• 👩‍🏭 Cars & car parts
• 🏭 Mechanical engineering
• 🧪 Chemicals & pharmaceuticals
• 🪄 Electronics & high-tech

The elimination of customs duties and fewer trade barriers will increase the margins and competitiveness of these industries.

Possible examples of Frofiteurs:

• VW $VOW (-3,84%) BMW $BMW (-3,47%) Daimler $DTG (-4,41%)
• Siemens $SIE (-5,41%)
• BASF $BAS (-5,21%) Covestro $1COV (+0,41%)
• SAP $SAP (-2,92%) , ASML $ASML (-4,55%)

➡️ Expected share price impetus from higher export revenues and capped production costs.

_________________________

🍖 2. agricultural & food sector in focus

The agricultural business is also becoming more closely networked on both sides:

• Tariffs on wine, oil, cheese, dairy products and luxury foods are being reduced or gradually created.
• EU producers will gain greater market access in South America; conversely, South American agricultural exports (e.g. beef, sugar) will have better access to the EU.

Possible beneficiaries:

• Nestlé $NESN (-1,36%) Danone $BN (-0,14%)
• Heineken $HEIA (-2,45%) AB InBev $ABI (-1,81%)
• FrieslandCampina $FCEPL

⚠️ However, critics point out that price pressure on local farmers* also arises and environmental risks can increase, for example due to cheaper imports.

_________________________

🚗 3. raw materials & energy: medium to long-term effects

Mercosur countries export large quantities of raw materials:

• Soy, sugar, coffee, ethanol, grain
• Brazil is also a major supplier of crude oil and minerals

One of the aims of the agreement is more stable commodity trade with fewer tariffs, which can influence commodity prices and move the shares of commodity and energy companies.

Possible beneficiaries:

• Vale $VALE3 (-3,76%) Petrobras $PETR3 (+5,1%)
• Bunge $BG (-0,12%) , ADM $ADM (+0,82%)

_________________________

🏦 4. finance & services sector

The agreement also facilitates:

• Market access for financial services
• Opening of telecom and transportation markets
• Opening of public procurement to EU suppliers

➡️ This could strengthen banks, insurers and logistics companies that operate across borders.

Possible beneficiaries:

• Allianz $ALV (-4,87%) Deutsche Bank $DBK (-5,25%)
• DHL/Deutsche Post $DHL (-4,19%) Kuehne + Nagel $KNIN (-2,69%)

_________________________

🔄 Short-term market risks

Not everything is automatically positive:

• 🇪🇺 Agricultural protests in Europe show resistance to cheap imports.
• Political uncertainties remain - many parliaments need to ratify.
• Sectors with low competitiveness could come under price pressure.

_________________________

📌 Conclusion

The Mercosur agreement could be an issue with far-reaching effects:

✅ Strong export industry gains new sales markets

✅ Agricultural and luxury food sector gains sales opportunities

✅ Financial and service sector benefits from market expansion

✅ Raw material exporting countries in South America could become more integrated

⚠️ At the same time, there are risks for local producers and price distortions that could have a regional impact on share prices

_________________________

Question for you: What is your opinion on the agreement? And in which sectors or listed companies do you see the biggest winners in the long term?

_________________________

Sources:

- 🌎🤝 Mercosur-Freihandelsabkommen zwischen EU & Mercosur unterzeichnet – größte Freihandelszone weltweit

- 💶📈 Wirtschaftliche Chancen für EU-Exporteure und Importeure durch Zollerleichterungen

- ⚙️🚗 Branchenanalysen mit Zollabbau-Effekten für Maschinen, Autos, Chemie etc.

- 🌾🥩 Agrar- und Rohstoff-Impakte durch neue Marktchancen und Quotenregelungen

And it continues, this time with $CHWY (-0,7%) which has only recently found its way into my portfolio:

Morgan Stanley $MS (-1,23%) has left the rating for Chewy (NYSE: CHWY) to 'overweight'. The price target is $51.00 after $48.00 previously.

Unfortunately, I am not able to provide details on the rationale here.

An interesting assessment of $CHWY (-0,7%) was also found in an insight from Deutsche Bank $DBK (-5,25%) :

After several years of using excess capacity to increase margins, where do investors still find potential for margin improvement in 2026, and where do we expect the most solid return on investments to be scaled this year?

$CHWY (-0,7%) has the clearest path to incremental margin expansion within our universe of observations as the company moves out of the peak investment phase in 2025.

Source: investing.com (pro-subscription, so the articles are behind a paywall and I save myself the trouble of attaching them😉)

$DBK (-5,25%)
$MS (-1,23%)
$GLE (-5,58%)
$BAC (-1,03%)

Reading time: approx. 5-6 minutes

Many of my recent posts have focused on metrics that have been with investors for decades: EV/EBITDA, free cash flow yield, ROIC, margins. The price-to-book ratio also belongs in this category - but more as a historical relic than as a central management tool. Hardly any other key figure shows so clearly how far capital markets and business models have diverged.

The P/B ratio compares the stock market value of a company with its balance sheet equity. The logic behind this is simple: what do I pay on the market for what is "there" according to the balance sheet? In a world of factories, machines and warehouses, this was plausible for a long time. In a world of software, platforms, brands and data, it is becoming increasingly misleading.

Formally, the calculation is quickly explained. Price times number of shares equals market capitalization. This is set in relation to the equity from the balance sheet. A P/B ratio of 1 means that the market values the company exactly at its balance sheet book value. Below 1 was traditionally regarded as "intrinsic value", above 1 as a premium.

This is exactly where the problem begins: the book value is not an economic value, but an accounting residual item. It results from historical acquisition costs less depreciation - not from a company's ability to generate future cash flows. The more intangible, scalable and knowledge-based business models are, the less this residual item says about the economic reality.

This worked comparatively well in the industrial economy. Steelworks, energy suppliers, banks and insurance companies had large, clearly measurable assets. Machinery, real estate, loan portfolios - they all appeared on the balance sheet. Those who bought below book value were often actually buying substance with a margin of safety. Benjamin Graham and early value investors built entire strategies on this.

Today, this logic is only viable in niches. A modern software company invests massively in research, development, employees and marketing. As a rule, these expenses are immediately booked as costs. Equity capital barely shrinks or grows, even though enormous economic value is created: proprietary software, network effects, customer data, brand trust. The result is an extremely low book value - and therefore an astronomically high P/B ratio. Not because the company is "expensive", but because the denominator is structurally distorted.

A look at $MSFT (-1%) (Microsoft) makes this devaluation particularly tangible. Despite decades of profitability, enormous free cash flows and very high returns on capital, equity is comparatively low in relation to market capitalization. Research, software development and cloud infrastructure largely appear as expenses in the income statement. The economic value arises off the balance sheet. The double-digit P/B ratio is therefore not a warning signal, but an accounting artifact.

A similar picture can be seen at $V (-0,86%) (Visa). The company operates a global payment network, requires hardly any physical capital and still achieves exceptionally stable margins. At the same time, continuous share buybacks reduce equity, although they increase the shareholders' stake in the company. The P/B ratio rises - although neither the competitive position nor the cash flow stability deteriorate. Anyone focusing on the book value here is completely missing the point of the business model.

Conversely, a high book value can be misleading. A classic industrial group such as $TKA (-6,67%) (Thyssenkrupp) has large property, plant and equipment, long depreciation cycles and therefore a high balance sheet equity. At times, this results in very low P/B ratios, which appear favorable at first glance. In practice, however, they often reflect structural challenges: cyclical demand, low returns on capital and limited pricing power. The book value is there - the economic quality often is not.

At $GOOGL (-2,02%) (Alphabet), the discrepancy between book value and economic value is clear. Despite enormous cash flows, high ROIC values and one of the strongest brands in the world, equity is only growing moderately. Data, algorithms and network effects form the core of value creation, but hardly appear on the balance sheet. A P/B ratio comparison with traditional media or industrial companies is therefore meaningless.

Banks such as $DBK (-5,25%) (Deutsche Bank). Here, equity is central for regulatory purposes, the assets consist mainly of financial items and value adjustments have a direct impact on profitability. A P/B ratio below 1 can actually indicate undervaluation - or doubts about the quality of the assets. In this segment, the P/B ratio is not obsolete, but highly context-dependent. Without a deep understanding of the balance sheet risks, the multiple alone remains inadequate here too.

All these examples lead back to the core message: the P/B ratio does not measure value creation, but capital commitment. This is precisely why it has lost its explanatory power in the digital economy. It is backward-looking, while markets price in expectations about future cash flows, growth and risks.

This effect has become particularly apparent in recent years. Companies with high returns on capital and scalable models received valuation premiums - regardless of their book value. With rising interest rates, the focus shifted more towards profitability and cash flow quality, but not back to the book value. The benchmark changed, the P/B ratio remained marginal.

Does this mean that the P/B ratio is worthless? No. But its field of application is narrow. It can be useful for banks, insurance companies or genuine asset-heavy turnaround cases where substance can actually be liquidated. It is unsuitable for platforms, software and data-driven business models and is not suitable as the sole selling point.

Modern analyses therefore focus on something else: returns on capital such as ROIC, free cash flow yield, margin stability and growth. These key figures measure how efficiently capital is deployed - not how much of it is historically tied up.

This also closes the meta-circle of this series. Many traditional balance sheet ratios date back to a time when value creation was physical, linear and capital-intensive. Today, value is increasingly created through knowledge, software, networks and scaling. These values defy traditional balance sheet logic.

As a result, book value is not only becoming less important - it often tells the wrong story. Those who use it uncritically run the risk of confusing substance with quality or growth with overvaluation.

The decisive thought at the end: good investors do not ask what is on the balance sheet, but what a company will earn in the future - and at what risk. The KBV looks back. The market looks forward. That is precisely why it hardly counts any more.

In the end, the question is less about the "right" key figure and more about the right analysis tool. Which key figures do you primarily use today to classify the quality and valuation of a company? Where do traditional balance sheet figures still provide you with real added value - and where do you consciously turn to cash flow, return or growth figures? And more specifically: which key figures or correlations would you like to see more in-depth coverage of in the series?

$PYPL (-2,53%)

$DBK (-5,25%)

According to the Süddeutsche Zeitung, Deutsche Bank now processes a large proportion of PayPal's US payment transactions. transactions.

The majority of transactions - whether purchases or peer-to-peer payments - are said to be processed via Deutsche Bank's systems.