Europe: European stock exchanges regain ground after German GDP drop

  •   18/05/2020 - 10h40
  •   DEHOUI Lionel

Global stock market fluctuations have become very indecisive since this coronavirus pandemic froze most economic activities. However, with the deconfinement measures announced, some financial institutions and business sectors are gradually coming back to life. This is particularly the case for European stock exchanges, which have recorded a slight increase in value. This has happened without Germany, as its gross domestic product has unfortunately fallen

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Europe: European stock exchanges regain ground after German GDP drop
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The fall in German GDP: a predictable situation

Also affected by Covid-19, Angela Merkel's country should, like other states in the world, suffer a reduction in its GDP. An opinion clearly shared by economic experts who, however, did not imagine that this fall would also be less significant.

For the latter, it should indeed be well above the announced 2.2%. It must be stressed, however, that it is so slight, because Germany was able to take drastic measures very early on to combat this global pandemic.

This was very late in coming in France and Italy, however, and will have caused a much greater fall in their respective GDPs. Although the effects of the decline in its GDP will certainly be felt, Germany compared to other European countries is therefore doing rather well.

 

The fascinating revival of European stock exchanges without Germany

In view of the current situation, one would be led to believe that European stock exchanges will remain in the dark for a very long time. This is not the case, because against all expectations, they have once again been slightly increased.

Indeed, while London announced its +1.5% and Frankfurt counted +1.9%, the Paris stock exchange as for it posted +1.1%. Fascinating regains which for some specialists have been facilitated by the various measures to ease containment taken by several euro zone countries.

Germany is the only country excluded from this dynamic and wishes to remain cautious in the face of this pandemic. A position that could well have an impact on the recovery of its activities. Experts even believe that if nothing is done, the German Chancellor's country could see its GDP fall even further in the second quarter. According to forecasts, it could fall by as much as 10%.

 

The revival of European stock markets is sounding the alarm in America..

When this news was announced, American operators decided to be even more vigilant. They promise to take a look at April's retail sales and industrial production rate.

Moreover, they also promise to carefully analyze the New York Fed's Empire State Index. Operations that should enable them to take major decisions to cope with this European surge.

Finally, just like the fall in German GDP, many companies based in this part of the world are also on the lookout. Following the example of Richemont and Solvay, which have fallen by 1% in Zurich and 3% in Brussels respectively, they are increasingly worried. This therefore calls on the German government and all the economic players in that country to work to change this crisis situation.