Deutsche Bank co-CEO Warns of Highly Optimistic Mood in Markets
Deutsche Bank AG (DBK), continental Europe’s biggest bank, said some investors are probably underestimating the ramifications of the European debt crisis and a political stalemate over the U.S. debt ceiling.
“The highly optimistic mood in the financial markets indicates a risk that some market participants may be underestimating the fiscal policy difficulties in the U.S. and the consequences of the European debt crisis,” co-CEO Juergen Fitschen said in a speech to shareholders in Frankfurt today.
Global stocks have climbed in the past four weeks, boosting market capitalization by $2.3 trillion and pushing the MSCI All-Country World Index to the highest level since 2008 amid growing confidence in the global economy. A stock rally in the U.S. will last at least through 2015, Goldman Sachs Group Inc. forecast two days ago.
The Stoxx 600 Europe index dropped 2.3 percent to 303.08 at 10 a.m. in London, the biggest decline in 10 months, on concern the Federal Reserve will scale back stimulus measures and data showed Chinese manufacturing was shrinking. The index gained 27 percent over the past 12 months. Contracts on the Standard & Poor’s 500 Index fell 1.1 percent.
Deutsche Bank sees “good prospects” for stabilization in markets this year, after expectations for a recovery were thwarted by the crisis in 2011 and 2012, Fitschen said in a translated copy of the speech handed to reporters.
To contact the editor responsible for this story: Frank Connelly at firstname.lastname@example.org