Key Takeaways
- German Finance Minister Lars Klingbeil has warned that a proposed EU-US trade deal, including a 15% tariff on EU car exports to the US, will significantly harm the German economy and has called for countermeasures if a fair agreement is not reached.
- Kraft Heinz (KHC) reported strong Q2 2025 earnings, with adjusted EPS of $0.69 surpassing estimates of $0.64 and revenue reaching $6.35 billion against an estimated $6.26 billion.
- US MBA Mortgage Applications declined by 3.8% week-over-week, a notable drop from the previous week's 0.8% increase, indicating a potential slowdown in housing market activity.
German Concerns Mount Over EU-US Trade Deal
German Finance Minister Lars Klingbeil has voiced strong concerns regarding the recently proposed trade framework between the European Union and the United States, asserting that the deal, particularly its tariff implications, will negatively impact the German economy. Klingbeil stated that the EU must be prepared to implement "decisive countermeasures" if a truly fair trade agreement cannot be achieved.
The proposed deal includes a 15% tariff on EU car exports to the US, a significant reduction from the earlier 27.5% imposed by the US, but still a point of contention for German industry. Advisors to Klingbeil suggest that the energy agreements within the deal, which commit the EU to substantial purchases of US LNG, oil, and nuclear fuels, primarily benefit the American economy. German industry associations, including the Federal Association of German Industry (BDI) and the Federal Association of Wholesale Trade, Foreign Trade and Services (BGA), have labeled the agreement a "painful compromise" that could lead to "lost growth, welfare, and jobs" in Germany.
Despite these criticisms, German Chancellor Friedrich Merz has acknowledged the agreement as a means to avert a full-blown trade conflict, especially for the automotive sector. However, the steel and aluminum industries also express significant apprehension, as specific tariff rates for their exports to the US remain undetermined.
Kraft Heinz Delivers Strong Q2 2025 Results
Food giant Kraft Heinz (KHC) has reported better-than-expected financial results for the second quarter of 2025. The company announced adjusted earnings per share (EPS) of $0.69, exceeding analyst estimates of $0.64.
Revenue for the quarter also surpassed expectations, coming in at $6.35 billion compared to an estimated $6.26 billion. Looking ahead, Kraft Heinz provided an outlook for full-year organic growth ranging from -3.5% to -1.5% and an adjusted EPS outlook between $2.51 and $2.67. These figures suggest a resilient performance by the consumer staples company amidst varying economic conditions.
US Mortgage Applications Decline
In the housing market, US MBA Mortgage Applications experienced a week-over-week decrease of 3.8%. This marks a reversal from the previous week's 0.8% increase.
The Mortgage Bankers Association (MBA) Mortgage Application Activity Index, which tracks weekly mortgage loan applications, indicates a cooling in demand for mortgage loans. While the previous week saw a slight uptick, this recent decline suggests that homebuyers may be exercising caution, potentially awaiting further clarity on future borrowing costs before committing to significant financial decisions. Applications for refinancing mortgages, which are more sensitive to interest rate changes, saw a 3.3% decline from the previous week.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.