Deutsche Bank has just gone on the record with a bold prognostication. The bank says that the global economy is “bottoming out”. While that may sound grave without further context, what Deutsche actually means is that the global economy has already seen the worst of the current downturn. The bank expects that the world’s economy will be improving next year, meaning we may have finally turned the corner on slowdown fears. “Key to our optimism is that the risks of trade wars and Brexit are evolving in positive ways, and the possibility of a radical policy shift to the far left in the U.S. and the U.K. after their respective elections seems remote”, says Deutsche Bank’s research team.
FINSUM: So did we just go through a “recession” and now the economy and market are ready to turn the jets back on? Quite optimistic (especially after a 25% gain in the S&P this year), but not altogether unlikely.
Deutsche Bank is an uber dove. The bank has just come out saying it expects the Fed to make three full rate cuts before the end of the year. “Over the past month, downside risks to the outlook for the US economy and Fed have built”, said Deutsche Bank, continuing that a mix of different concerns, from the trade war to weak inflation, are pointing to “more negative outcomes”. Pimco thinks the Fed won’t cut this month, but that it may cut by 50 bp in July, saying “we wouldn’t expect Fed officials to wait for the economic data to confirm declining US growth — if they do, they could risk a more meaningful shock to economic activity”.
FINSUM: The odds of a downturn certainly seem higher than an upturn, which means the Fed is much more likely to cut than to hike. That said, three rate hikes in the next six months sounds a bit aggressive to us, especially because the Fed would want to leave some firepower if the economy really heads downward.
If you are a strong advisor looking for a change, Deutsche Bank may be interested in speaking with you. At least that is what Deutsche Bank is saying. The US wealth management arm of the German bank says it wants to growth the ranks of its wealth advisors by 25% this year. According to the head of Americas wealth management there, the orders from the top are to “grow, grow, grow”, adding that “We’re getting dollar investment going into the unit for headcount . . . there’s great access to the management board.”
FINSUM: This is a big initiative considering that the only European brand to have any foothold in US wealth management is UBS. The other big names are all American.
Deutsche Bank has just put out a stern warning on what is one of the quickest growing asset classes there is. Yes, you guessed it, cryptocurrencies. The bank does not recommend any of its wealth management clients to invest in the space, saying “We do not recommend that. It’s only for investors who invest speculatively … There is a realistic risk of total loss”. The bank says cryptos are plagued by high volatility, possible price manipulation, and data loss or theft.
FINSUM: Just to clarify our opinion on cryptos, our view is that they are not going anywhere and will likely be a part of financial markets for the foreseeable future. However, they have such high regulatory risk right now, and such a lack of clarity on valuation, that it is simply too risky to put any money in.