European markets in red as global economic worries weigh
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 21 2025
0mins
Should l Buy GF?
Source: SeekingAlpha
Market Overview: European markets experienced declines, with the Stoxx 600 down 0.45%, as investors reacted to global economic uncertainties and recent monetary policy updates from central banks, including the U.S. Federal Reserve.
Geopolitical Developments: The EU plans to significantly increase defense spending amid rising geopolitical tensions, while Germany's upper house is set to vote on a debt brake amendment that has already passed in the lower house.
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Analyst Views on GF
Wall Street analysts forecast GF stock price to rise
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Current: 12.010
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About GF
The New Germany Fund, Inc. (the Fund) is a diversified, closed-end management investment company. The Fund seeks long-term capital appreciation primarily through investment in middle-market German equities. The focus of the Fund's investments lies within Germany. Under normal market conditions at least 80% of the Fund’s net assets are invested in equity or equity-linked securities. The Fund invests in range of sectors, which include aerospace and defense; auto components; automobiles; banks; building products; chemicals; electrical equipment; independent power and renewable electricity producers; insurance; Internet and direct marketing retail; information technology (IT) services, life sciences tools and services; metals and mining; real estate management and development; software; textiles, apparel and luxury goods; trading companies and distributors; diversified financial services; commercial services and supplies, and others. The Fund's investment advisor is DWS International GmbH.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Year-over-Year Growth: The Euro Area's GDP grew by 1.3% year-over-year in 2025, meeting analyst forecasts, suggesting ongoing economic recovery that may support future policy decisions.
- Trade Surplus Changes: In December 2025, the Euro Area recorded a trade surplus of €12.6 billion with the rest of the world, down from €13.9 billion in December 2024, reflecting shifts in the global trade environment.
- Export and Import Data: Euro Area goods exports reached €234 billion in December 2025, a 3.4% increase year-over-year, while imports stood at €221.3 billion, up 4.2%, indicating strengthened external demand and economic activity recovery.
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- Inflation Data: Switzerland's consumer prices rose by 0.1% year-on-year in January, while Spain's inflation dropped to 2.3%, data that could influence the European Central Bank's monetary policy decisions amid weak economic growth.
- Bond Market Dynamics: The U.S. 10-year Treasury yield increased by 2 basis points to 4.12%, with Germany and the UK’s 10-year yields rising slightly, highlighting market focus on future interest rate trends that may affect investor asset allocation.
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- Trade Deficit Improvement: The UK's trade deficit narrowed to £4.34 billion in December 2025, reflecting improvements in exports and reductions in imports, which will help enhance the country's economic fundamentals.
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- Retail Data Impact: Weaker-than-expected U.S. retail sales data has strengthened expectations for Fed interest rate cuts later this year, leading to a marginal decline of 0.05% in the pan-European Stoxx 600 index to €620.6, reflecting investor concerns about future monetary policy.
- Precious Metals Prices: Gold prices rose above $5,060 per ounce on Wednesday, hovering near a nearly two-week high, indicating increased demand for safe-haven assets amid economic uncertainty.
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- Denmark's Inflation Deceleration: Denmark's annual inflation rate slowed to 0.8% in January 2026, indicating reduced price pressures that could provide consumers with greater purchasing power while potentially influencing future monetary policy decisions.
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- Year-over-Year Growth: The Euro Area's GDP grew by 1.3% year-over-year in 2025, meeting analyst forecasts, suggesting ongoing economic recovery that may support future policy decisions.
- Trade Surplus Changes: In December 2025, the Euro Area recorded a trade surplus of €12.6 billion with the rest of the world, down from €13.9 billion in December 2024, reflecting shifts in the global trade environment.
- Export and Import Data: Euro Area goods exports reached €234 billion in December 2025, a 3.4% increase year-over-year, while imports stood at €221.3 billion, up 4.2%, indicating strengthened external demand and economic activity recovery.
See More
European Market Dynamics and Inflation Data
- Market Performance: The pan-European Stoxx 600 index fell by 0.11% to 617.9, reflecting investor caution following a sell-off in U.S. stocks driven by AI concerns, indicating worries about future economic trends.
- Inflation Data: Switzerland's consumer prices rose by 0.1% year-on-year in January, while Spain's inflation dropped to 2.3%, data that could influence the European Central Bank's monetary policy decisions amid weak economic growth.
- Bond Market Dynamics: The U.S. 10-year Treasury yield increased by 2 basis points to 4.12%, with Germany and the UK’s 10-year yields rising slightly, highlighting market focus on future interest rate trends that may affect investor asset allocation.
- Economic Outlook: Despite cautious market sentiment, the UK GDP is expected to grow by 1% year-on-year in Q4, with a narrowing trade gap, potentially providing support for future economic recovery and boosting market confidence.
See More
UK GDP Expected to Grow 1% Year-on-Year in Q4
- Economic Growth Outlook: The UK GDP is expected to grow by 1% year-on-year in Q4 2025, indicating resilience in the economy amidst global uncertainties, which could bolster investor confidence and stimulate consumer spending.
- Trade Deficit Improvement: The UK's trade deficit narrowed to £4.34 billion in December 2025, reflecting improvements in exports and reductions in imports, which will help enhance the country's economic fundamentals.
- Inflation Slowdown Signs: The annual inflation rate in the Netherlands slowed to 2.4% in January, which may influence the European Central Bank's monetary policy decisions and further shape market expectations regarding future interest rate movements.
- Positive Market Performance: The pan-European Stoxx 600 index rose by 0.58%, indicating that despite challenges, major European benchmarks remain in positive territory year-to-date, reflecting resilience in corporate earnings outlook.
See More
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- Market Performance: The London stock market rose by 0.44% to 10,398 points, while Germany's DAX index dipped by 0.14% to 24,977 points, and France's CAC index fell slightly by 0.06% to 8,323 points, indicating cautious market reactions to economic data.
- Retail Data Impact: Weaker-than-expected U.S. retail sales data has strengthened expectations for Fed interest rate cuts later this year, leading to a marginal decline of 0.05% in the pan-European Stoxx 600 index to €620.6, reflecting investor concerns about future monetary policy.
- Precious Metals Prices: Gold prices rose above $5,060 per ounce on Wednesday, hovering near a nearly two-week high, indicating increased demand for safe-haven assets amid economic uncertainty.
- Bond Market Dynamics: The U.S. 10-year Treasury yield fell to 4.14%, with Germany's and the UK's 10-year yields also decreasing by less than 1 basis point, suggesting a cautious market outlook on interest rates.
See More
European Economic Data Fluctuates, Impacting Markets
- Rising Unemployment in France: The unemployment rate in France increased to 7.9% in Q4 2025, surpassing the expected 7.8% and up from 7.7% in the previous quarter, indicating a fragile economic recovery that could dampen consumer confidence and spending.
- Sweden's Industrial Production Growth: Sweden's industrial production rose by 4.2% year-over-year in December, reflecting strong performance in the manufacturing sector, which may support future economic growth and enhance investor confidence in the Swedish market.
- Denmark's Inflation Deceleration: Denmark's annual inflation rate slowed to 0.8% in January 2026, indicating reduced price pressures that could provide consumers with greater purchasing power while potentially influencing future monetary policy decisions.
- Norway's Accelerating Inflation: Norway's annual inflation rate accelerated to 3.6% in January 2026, suggesting increased price pressures that may prompt the central bank to adopt a tighter monetary policy stance to combat rising inflation.
See More
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- Acquisition Deal: NatWest Group has agreed to acquire wealth management firm Evelyn Partners for £2.7 billion, marking the bank's first major acquisition since returning to private ownership, which is expected to enhance its competitive position in the wealth management sector.
- Market Reaction: The pan-European Stoxx 600 index rose by 0.52% as investors positioned themselves ahead of key U.S. jobs and inflation data, reflecting optimism in the market that could influence future monetary policy decisions.
- Bond Yield Changes: The U.S. 10-year Treasury yield increased by 3 basis points to 4.23%, indicating heightened expectations for economic growth, while Germany and the UK also saw their 10-year yields rise to 2.86% and 4.55%, respectively.
- Precious Metals Market: In the precious metals market, silver prices surged by 5% and gold gained over 1%, indicating increased demand for safe-haven assets, likely linked to global economic uncertainties.
See More
