Deutsche Bank Strategists Predict Positive Outlook for Equities Until 2024
Deutsche Bank Strategists Recommend Equity Overweight
Strategists at Deutsche Bank have expressed optimism for the equity market, recommending an overweight in equities until 2024. They believe that current risks in the market are well reflected and are about to transform into opportunities. Led by Maximilian Uleer, head of European Equity- and Cross Asset Strategy, the Deutsche Bank strategists stated that weaker growth, disappointing earnings, and central bank communication in Q3 were anticipated. However, they note that these risks now appear to be adequately priced into the markets.
Positive Forecast for European Markets
Deutsche Bank has set its 2024 forecast for the Euro STOXX 600 at 510, for the Euro STOXX 50 at 4,850, and for the DAX at 18,000. Currently, Europe’s STOXX 600 is trading at 450.8 points, indicating a potential 13% upside from current levels. Uleer emphasizes that markets are still cautiously priced, leaving room for positive surprises. The base case scenario is for the euro zone to avoid a recession.
Neutral Stance on U.S. Equities, Underweight on Switzerland’s SMI
Deutsche Bank remains neutral on U.S. equities compared to Europe. Within Europe, they are underweight on Switzerland’s SMI due to its defensive nature in a bullish market. The bank’s preference is to purchase long-duration government bonds with high ratings over credit.
Impact of Geopolitical Conflict on Oil Prices
Uleer highlights that lower oil exports resulting from the escalation of the Israel and Palestine conflict pose a threat to the current forecast of oil trading at $92 a barrel by year-end. The price could potentially remain closer to $88 if the conflict persists.
The article offers a positive outlook on equities, with Deutsche Bank strategists anticipating opportunities in the market. Despite the expected challenges, they believe that risks are adequately priced in and that the equity market will thrive in the coming years. The forecast for European markets is also positive, with potential upside in the Euro STOXX 600. However, caution is advised, as geopolitical conflicts can impact oil prices. Overall, Deutsche Bank’s recommendations provide valuable insights for investors looking to navigate the market and seize opportunities.
