Deutsche Bank's Torsten Slok Names 30 Market Risks for 2018

North Korea Crisis Continues to Escalate

If markets have been too placid for your liking, fear not: Deutsche Bank AG economist Torsten Slok has identified 30 risks investors should watch for in 2018, ranging from a U.S. equity correction to a reversal of Brexit to Irish presidential elections.

The risks should be thought of “not only as potential VIX-boosters but also as potential sources of faster or slower growth than what we have in our baseline forecast,” Slok wrote in a note Thursday.

Deutsche Bank U.S. Growth Forecasts

Central banks feature on the list, with the Federal Reserve’s new leadership set to be tested. The Bank of Japan may see Governor Haruhiko Kuroda replaced and his signature policy of yield curve control tweaked. And there’s the possibility that the European Central Bank will telegraph its exit from quantitative easing in the second quarter, the economist said.

Real estate and politics are also prominent on the list. Slok points to the potential bursting of housing bubbles in Australia, Canada, China, Norway or Sweden. Elections in Ireland, Italy, Russia, the U.S. and the U.K. also make the list.

There’s something for everyone: a bitcoin crash, the Robert Mueller investigation and a continued rise of inequality in the U.S. are all events that Slok recommends investors look out for. One item on the list simply says “North Korea.”

The economist also called out U.S. equities, both for a potential mismatch between valuation and fundamentals, and for a possible correction. 

“Are markets ready for even a small correction?” Slok asked, noting there hasn’t been one for “a long time.”

The full list is here:

30 Risks to Markets in 2018

Deutsche Bank’s Torsten Slok

— With assistance by Felice Maranz

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