德银写道，Since August, the US stock market has been heavily sold off, but has rebounded in recent days; Deutsche Bank warns that the market is still at risk of repeating the same mistake; Deutsche Bank said that although the market has since recovered, the catalyst behind the stock market's decline has not disappeared.
Since August, the US stocks have been heavily sold off, but there has been a rebound in the last few days. Deutsche Bank warned in a recent research report that the market is still prone to repeating past mistakes.
Earlier this month, after a series of disappointing economic data and weak performance by technology companies, major US stock indices plummeted. The unwinding of the yen carry trade has exacerbated the situation.
Deutsche Bank said that although the market has since recovered, the catalyst behind the stock market's decline has not disappeared. The bank has listed five risks that investors should still be concerned about.
The bank stated that first, stock valuations are still at historic highs and market trading is in the moderately overbought range. Prior to the sell-off in August, some analysts on Wall Street were already concerned about this, and as investments continue to pour in, this concern will continue to exist.
Second, economic data is still fragile. One of the reasons for the sharp decline in the stock market in August was the lower-than-expected non-farm payroll employment in the United States.
Deutsche Bank said that this is an unwelcome sign of weakness, but not a sign of economic recession. The bank pointed out that there may be more disappointing data in the future, which will have a greater impact on investors.
Third, actual monetary policy is becoming tighter and Deutsche Bank pointed out that the actual federal funds rate has recently reached its highest level since 2007.
Fourth, for the past few years, September has been a seasonal low month for the stock market. The S&P 500 index has fallen in September for four consecutive years, and has fallen for seven years out of the past ten.
Deutsche Bank also stated that September is also a month of poor performance for fixed income, and the Bloomberg Global Bond Index has fallen in September for the past seven years.
Fifth, geopolitical tensions remain high. Deutsche Bank pointed out that Middle East conflicts caused a sell-off in the stock market in April, and oil prices also hit their highest point of the year at about the same time.
The bank also stated that in the recent August, due to reports that the situation was escalating, oil prices experienced their largest single-day increase of the year.
The US stock market recently experienced its worst August opening since 2002. On August 5, the US stock market experienced a "Black Monday", with both the Dow and S&P recording their worst day in nearly two years. However, it has since rebounded strongly, with the S&P 500 and Nasdaq recording eight consecutive increases as of Monday.
The three major US stock indices fell together on Tuesday, ending their recent streak of gains as investors remain cautious ahead of the Jackson Hole central bank meeting.
Editor/ping