European markets were having a rough trading day on Thursday. Economic predictions turned, particularly regarding the German economy, which now risks a triple-dip recession in 2025. German Economy Minister Robert Habeck today further cut his ministry’s 0.3% growth prediction from January. This reversal brings to the fore growing concerns about the negative impact of trade unpredictability, including tariffs and retaliatory measures, on the euroarea.
The DAX index in Germany fell by 0.3% at 1:57 p.m. Frankfurt time, indicating investor caution in light of deteriorating projections. Meanwhile, Kering shares dropped significantly, down 6.3% by 9:11 a.m. London time, after initially being halted at the market open. As a result, Kering’s shares have fallen more than 11% this year. This sharp decline can signal a much more unfortunate trend for the company.
Austrian central bank chief Robert Holzmann, speaking on the need for clarity on U.S. tariffs and EU retaliatory measures. He argued for a higher eurozone interest rate to be maintained until the way forward becomes clearer. Holzmann, known for his hawk credentials in the European Central Bank (ECB), calls for a more gradual approach to monetary loosening. He thinks this is key, especially now that inflation is beginning to level off.
In a broader context, Pierre Gramegna referenced two pivotal reports concerning the bloc’s competitiveness and future during discussions on economic strategies. He stated, “So we have to get our act together. There’s a lot of things that we know we have to do, the Draghi report tells us what we have to do in the banking union and the Letta report tells us what we have to do in the savings and investments union.” Gramegna added that without proactive measures, “if we do not help ourselves…the rest of the world is not going to help us.”
On a brighter note, Revolut announced it achieved over $1 billion in annual profit for the first time, showing resilience amid economic challenges. Dassault Systèmes stock price dropped 7% after missing earnings forecasts Q1 2025. Delivery Hero has delivered positively on first-quarter earnings. Online sales were up 5%—an incredible example of just how well some industries have adjusted to this ‘new normal’ and flourished.
Adidas shares were up as much as 1.3% after the company blew past quarterly growth forecasts. With first-quarter sales climbing to €6.15 billion ($6.98 billion), investor faith in the brand’s resilience has been restored. Financial analysts noted that “Overall this is another strong print from adidas and reflects the strong brand heat and continued desirability which makes it slightly more insulated to the external factors,” according to Adam Cochrane.
In the face of these greatly encouraging trends, some market experts are feeling wary. Henry Allen remarked that “It’s clear that investors aren’t fully pricing a recession in just yet,” indicating a level of optimism that may not accurately reflect underlying economic risks. Rob Ginsberg and Read Harvey cautioned against bear market rallies, calling them “the most violent,” suggesting that investors remain vigilant.
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