Both the cryptomarkt and the traditional financial markets have had a hard time in recent weeks. According to Deutsche Bank, this period of unrest is by no means over. Investors must prepare: the recent recovery at the stock markets seems temporary and new turbulence is lurking.
Unrest due to trade war is increasing
Deutsche Bank sees dark clouds hanging above Wall Street and warns that US shares are being under pressure due to persistent uncertainty surrounding the trade war.
Main strategist Binky Chadha states that the sales pressure is not yet over and expects the mutual import duties to shake up the financial markets from 2 April.
According to Deutsche Bank, investors do not have to count on improvement in the short term. The bank does not expect that President Trump will quickly relax his trade policy. Trump sticks to his policy for as long as his popularity figures remain relatively high, despite growing unrest in the markets.
Chadha explains:
“Trumps popularity is currently high compared to consumer confidence, which only increases the downward risks for the markets.”
S&P 500 ends 7%
Due to the economic uncertainty, Deutsche Bank predicts that the American S&P 500 index can hardly fall. According to the bank, the index can fall to 5250 points, a loss of more than 7% compared to the current level of 5660 points. Important causes are the declining consumer confidence and the growing fear of an approaching recession.
Companies are now preparing for more difficult times. Recent quarterly figures show that CEOs are tempering their expectations, reducing costs and reducing profit forecast. This only strengthens the image of a vulnerable market.
Optimism for the long term remains intact
Despite the worries about the short term, Deutsche Bank remains positive about the recovery in the longer term. The bank previously predicted that the S&P 500 can recover to 7000 points towards the end of this year, which means an increase of almost 24%.
Chadha therefore emphasizes that it is too early to become pessimistic:
“It is too early to throw in the towel. Investors must prepare for volatility, but recovery remains a realistic scenario in the long term.”
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Source: https://newsbit.nl/deutsche-bank-waarschuwt-amerikaanse-aandelen-zullen-verder-dalen/
