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Deutsche Bank Strategists See Risk of US Stocks Sinking 25%

  • Earnings outlook, high valuations threaten sustained rally
  • Goldman, Morgan Stanley also said stocks may fall to new lows
A sign reading 'business and workplace rescue' inside a closed restaurant in Berlin.

A sign reading 'business and workplace rescue' inside a closed restaurant in Berlin.

Photographer: Liesa Johannssen-Koppitz/Bloomberg
Updated on

US stocks could slide a further 25% if the economy tips into recession, with risks to a sustained equity rally mounting, according to Deutsche Bank AG strategists.

With company profits set to drop, stock valuations still high and recession risks looming, the fundamental picture for stocks is challenging, strategists led by Binky Chadha wrote in a note dated Sept. 7. Still, investor positioning in equities is low, they added.