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German stocks hit record high as trade optimism buoys markets

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German stocks hit record high as trade optimism buoys markets

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Germany’s Dax index climbed to a record high on Friday, becoming the first major European benchmark to recoup the losses sparked by Donald Trump’s tariff threats, as investor optimism over US trade deals boosted the region’s markets.

The Dax rose 0.6 per cent, after Thursday’s announcement of a US-UK trade deal was followed by a call between the US president and Germany’s new chancellor, Friedrich Merz, in which they agreed on the need to resolve trade disputes quickly.

Merz, who warned after his election victory that Europe needed to “achieve independence” from the US, also struck a conciliatory tone with Trump, saying Washington remained an “indispensable friend and partner”. Both leaders had agreed to meet in the near future, the German government said.

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Officials from the US and China are also scheduled to meet this weekend for talks over the trade war. Treasury secretary Scott Bessent and trade representative Jamieson Greer will represent the US, while China’s delegation will be led by vice-president premier He Lifeng.

Trump wrote on his Truth Social network that an 80 per cent tariff on China “seems right”, signalling a potentially smaller reduction in the punitive levies than investors had anticipated.

The S&P 500 gave up early gains to trade little-changed on Friday.

The Dax’s return to all-time highs also reflects the wave of enthusiasm for German stocks sparked earlier this year by Merz’s plans to increase borrowing and inject hundreds of billions of euros into the country’s military and infrastructure.

Emmanuel Cau, head of European equity strategy at Barclays, said the trade news had given a broad boost to stock markets.

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But he added: “There is an extra degree of excitement in Germany as part of this revival narrative and the arrival of the new government. There’s more and more interest in Germany.”

German bonds, which have rallied in recent weeks while investors were seeking havens from market turmoil, gave up some of those gains as riskier assets outperformed.

The yield on 10-year German government bonds increased 0.04 percentage points by Friday afternoon, rising to 2.56 per cent. Bond yields move inversely to prices. 

European stocks have outshone their Wall Street peers this year because of optimism over defence spending combined with growing fears over the impact of Trump’s trade war on the US economy. 

The Dax is up nearly 18 per cent this year. Defence stocks have performed strongly following the spending commitments, with Rheinmetall up more than 170 per cent.

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The German stock market has also benefited from a strong performance from European banks. Deutsche Bank shares have risen 43 per cent this year.

While US stocks have also recovered their losses since Trump’s “liberation day” tariff announcements in early April, the S&P 500 benchmark remains well below its February all-time high and is down nearly 4 per cent so far in 2025.

Europe’s outperformance of Wall Street this year has partially narrowed a large valuation gap between US and European equities that had widened in recent years due to a relentless rally in US tech stocks.

“Peak trade fear is behind us,” said Laura Cooper, global investment strategist at Nuveen. But she added that “bouts of choppy price action” should be expected as the disruption from tariffs washes through the global trading system.

But asset managers have also urged caution, given Trump’s strong rhetoric on tariffs and broader concerns about US policymaking.

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“For now, this [rally] is holding,” said Kevin Thozet, a member of Carmignac’s investment committee. “But it is not evident that it will continue this way for a very long time. Peak Trumpism may be behind us but uncertainty is still there.”

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Video: Who Is Trying to Replace Planned Parenthood?

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Video: Who Is Trying to Replace Planned Parenthood?

new video loaded: Who Is Trying to Replace Planned Parenthood?

As efforts to defund Planned Parenthood lead to the closure of some of its locations, Christian-based clinics that try to dissuade abortions are aiming to fill the gap in women‘s health care. Our reporter Caroline Kitchener describes how this change is playing out in Ames, Iowa.

By Caroline Kitchener, Melanie Bencosme, Karen Hanley, June Kim and Pierre Kattar

December 22, 2025

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Weather tracker: Further flood watches issued across California

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Weather tracker: Further flood watches issued across California

After prolonged heavy rainfall and devastating flooding across the Pacific north-west in the past few weeks, further flood watches have been issued across California through this week.

With 50-75mm (2-3in) of rainfall already reported across northern California this weekend, a series of atmospheric rivers will continue to bring periods of heavy rain and mountain snow across the northern and central parts of the state, with flood watches extending until Friday.

Cumulative rainfall totals are expected to widely exceed 50mm (2in) across a vast swathe of California by Boxing Day, but with totals around 200-300mm (8-12in) possible for the north-western corner of California and western-facing slopes of the northern Sierra Nevada mountains.

Los Angeles could receive 100-150mm (4-6in) of rainfall between Christmas Eve and Christmas Day, which could make it one of the wettest Christmases on record for the city. River and urban flooding are likely – particularly where there is run-off from high ground – with additional risks of mudslides and rockslides in mountain and foothill areas.

Winter storm warnings are also in effect for Yosemite national park, with the potential for 1.8-2.4 metres (6-8ft) of accumulating snow by Boxing Day. Heavy snow alongside strong winds will make travel very difficult over the festive period.

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Golden Gate Bridge is covered with dense fog near Fort Point as rainy weather and an atmospheric river hit the San Francisco Bay Area on Saturday. Photograph: Anadolu/Getty Images

Heavy rain, lightning and strong winds are forecast across large parts of Zimbabwe leading up to Christmas. A level 2 weather warning has been issued by the Meteorological Services Department from Sunday 21 December to Wednesday 24 December. Some areas are expected to see more than 50mm of rainfall within a 24-hour period. The rain will be accompanied by hail, frequent lightning, and strong winds. These conditions have been attributed to the interaction between warm, moist air with low-pressure systems over the western and northern parts of the country.

Australia will see some large variations in temperatures over the festive period. Sydney, which is experiencing temperatures above 40C, is expected to tumble down to about 22C by Christmas Day, about 5C below average for this time of year. Perth is going to see temperatures gradually creep up, reaching a peak of 40C around Christmas Day. This is about 10C above average for this time of year.

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Lawmakers threaten Attorney General Bondi with contempt over incomplete Epstein files

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Lawmakers threaten Attorney General Bondi with contempt over incomplete Epstein files

Attorney General Pam Bondi, accompanied by Deputy Attorney General Todd Blanche (L) and FBI Director Kash Patel (R), speaks during a news conference at the Justice Department on Nov. 19. Some lawmakers said the department’s release of files relating to Jeffrey Epstein had too many redactions as well as missing information.

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Two lawmakers are threatening a seldom-used congressional sanction against the Department of Justice over what they say is a failure to release all of its files on convicted sex offender Jeffrey Epstein by a deadline set in law.

Reps. Ro Khanna and Thomas Massie spearheaded the effort to force the Epstein files’ release by co-sponsoring the Epstein Files Transparency Act, but both have said the release had too many redactions as well as missing information.

“I think the most expeditious way to get justice for these victims is to bring inherent contempt against Pam Bondi,” Massie, a Republican from Kentucky, told CBS’s Face the Nation on Sunday. “Basically Ro Khanna and I are talking about and drafting that right now.”

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Inherent contempt refers to Congress’ authority to fine or arrest and then bring to trial officers who are obstructing legislative functions. It was last successfully used in the 1930s, according to the American Bar Association.

Khanna, a California Democrat, noted that the House would not need the Senate’s approval to take such action, which he said would result in a fine for Attorney General Pam Bondi.

“I believe we’re going to get bipartisan support in holding her accountable,” he told Face the Nation.

Justice Department defends partial release

The Justice Department on Sunday defended its initial, partial release of documents, some of which were heavily redacted.

“The material that we released on Friday, or the material that we’re going to release over the next a couple of weeks, is exactly what the statute requires us to release,” said Deputy Attorney General Todd Blanche on NBC’s Meet the Press, referring to the Epstein Files Transparency Act.

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Blanche said the administration has hundreds of lawyers going through the remaining documents to ensure that victims’ information is protected. Still, lawmakers from both parties remain unsatisfied.

“Any evidence or any kind of indication that there’s not a full reveal on this, this will just plague them for months and months more,” said Republican Sen. Rand Paul of Kentucky on ABC’s This Week. “My suggestion would be — give up all the information, release it.”

Blanche told NBC he was not taking the threats of contempt seriously.

“Not even a little bit. Bring it on,” he said, adding that lawmakers who have spoken negatively about Bondi and FBI Director Kash Patel “have no idea what they’re talking about.”

Back and forth over Trump photo

The trove of documents released Friday contained little new information about Epstein, prompting accusations that the department wasn’t complying with the law. There was a photograph included in Friday’s release that showed a desk full of photos, including at least one of President Trump. It was among more than a dozen photographs no longer available in the Justice Department’s “Epstein Library” by Saturday, NPR found.

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On Sunday, the Justice Department re-uploaded the photo of the desk, and provided an explanation on X.

“The Southern District of New York flagged an image of President Trump for potential further action to protect victims,” the post read. “Out of an abundance of caution, the Department of Justice temporarily removed the image for further review. After the review, it was determined there is no evidence that any Epstein victims are depicted in the photograph, and it has been reposted without any alteration or redaction.”

The Justice Department did not offer an explanation for the other photos whose access had been removed.

Blanche told NBC the Justice Department was not redacting information around Trump or any other individual involved with Epstein. He said the Justice Department had removed photos from the public files “because a judge in New York has ordered us to listen to any victim or victim rights group, if they have any concerns about the material that we’re putting up.

“And so when we hear concerns, whether it’s photographs of women that we do not believe are victims, or we didn’t have information to show that they were victims, but we learned that there are concerns, of course, we’re taking that photograph down and we’re going to address it,” he said.

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Earlier Sunday, the Justice Department also posted to X a new version of the 119-page transcript of grand jury proceedings in the case of Epstein associate Ghislaine Maxwell. The original version had been entirely redacted.

“Here is the document now with minimal redactions. Documents and photos will continue to be reviewed consistent with the law and with an abundance of caution for victims and their families,” the Justice Department wrote in its post.

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