Stock market for Deutsche Bank’s wealth management is going to fall next year – and not ready for 2 big risks

There is no solid choice for those riding the stock-market wave. But Deutsche Bank’s international private bank’s main investment office has its limitations, as the team has set a 12-month price target for the S&P 500 SPX.
+ 0.47%
3,300 by the end of September 2021. The S&P 500 ended Tuesday at 3,443.12.

Tuan Huan, chief investment officer of Europe and Asia Pacific’s international private bank at Deutsche Bank, said that if Vice President Joe Biden, the incumbent front-runner in the election, wins, the bank will sell the S&P 500 in 2022 at $ 2022 a share. Assuming an earnings of, with a 1930 cost-to-earnings ratio, a target of 3230 has been given. Although Biden is proposing higher corporate taxes, Deutsche Bank does not expect them until 2022 due to a weak economy.

If President Donald Trump wins, Deutsche Bank will earn 2022 earnings per share of $ 180 due to the small tax burden. “He will still continue with his tax reform, which has benefited most tech companies, as their tax burden is now historically low,” Hunh said.

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   Huneh said the Tina trade has certainly not ended, as interest rates on government bonds are so low, and central banks have promised not to raise interest rates any time soon.  Initially, customers moved to investment-class bonds, and now Deutsche Bank is advising them to move to higher yields and emerging markets if they have a risk appetite.  "Clearly, higher equity allocation in the long term would be a proper asset allocation, and that's why Tina would play a very important role," he said.</p> <p>Huneh said that the bank is still recommending an increase in value shares.  Income from the technology sector that is due to come in the next two weeks will show further evidence that those companies have benefited from the coronovirus epidemic, which has benefited from e-commerce, digital entertainment and the trend of working from home.  Deutsche Bank is still cautious of value shares - automobile manufacturers have been hurt by the economic hit from the epidemic as well as the transition towards electric vehicles, and banks have long struggled with low interest rates for the environment.</p> <p>His clients, who are focusing on conservation rather than wealth creation, are looking for ways to diversify due to the interest rate environment.  "There is now a strong belief from our customers that rates will remain low for a long time and, therefore, they really have to do something, but it's not like they are turning 50% of traditional government bonds directly into corporate credit, high yield, emerging markets Or equity, "he said. Deutsche Bank Wealth Management had € 206 billion in assets under management at the end of June.</p> <p>He said, markets are not ready for two risks.  "Until then [the rise in coronavirus cases] If that doesn't really lead to a second lockdown, I think the markets will be fine.  But if we are looking at the same scenario as March or April, then it is clearly not yet priced, as banks like ours will need to adjust our GDP forecast, not only for this year but Maybe even for 2021.  "</p> <p>He said that another risk is of an election result which is not clear in one direction or the other.  It would take time to count the vote by mail, and in the meantime, Trump could declare himself the winner, which could lead to instability. </p> <p><strong>The buzz</strong></p> <p>After leaders on Capitol Hill extended their fiscal stimulus talks by one day, attention has returned to Washington, DC.  Associated Press Senate Leader Mitch McConnell warned the White House not to split Republicans with a $ 2 trillion relief deal with House Speaker Nancy Pelosi before the November 3 election.</p> <p>In other large political negotiations hanging on the market, the EU's chief negotiator, Michel Barnier, said a trade deal with Britain was within reach.</p> <p>Netflix nflx,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/202353025/composite" class="negative">-0.99%</bg-quote>
   The prepaid business fell 6%, as its third quarter reported 2.2 million net new customers, after two consecutive quarters of asylum-in-place orders related to the COVID-19 epidemic.  Its earnings were below expectations.</p> <p>Social media app Snap SNAP,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/205087158/composite" class="negative">-0.73%</bg-quote>
   The rally is due to post-surprise gains on better-than-expected revenue in the third quarter.  Other social-media stocks, including Facebook FB
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/205064656/composite" class="positive">+ 2.35%</bg-quote><span>,</span>
   Pinterest pins,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/211319641/composite" class="negative">-1.09%</bg-quote>
   And Twitter TWTR,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/203180645/composite" class="positive">+ 1.15%</bg-quote>
  Also advanced in prepaid trade.  Ericsson ERIC rallied in Stockholm after the telecom equipment manufacturer reported strong demand for 5G devices.  </p> <p>The economy is about 2 pm Eastern, about the Federal Reserve's Beige Book of Economy.</p> <p>Electric-vehicle manufacturer Tesla TSLA,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/203558040/composite" class="negative">-2.06%</bg-quote>
   The report results after the market closes.  Tesla has already reported deliveries for the third quarter, so the focus will be on fourth quarter profits as well as profits.</p> <p><strong>market</strong></p> <p>After a 113-point lead for the Dow Industrial DJIA,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210598065/realtime" class="positive">+ 0.40%</bg-quote>
   US stock futures ES00 on Tuesday,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/209948968/delayed" class="negative">-0.13%</bg-quote>

    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210219788/delayed" class="negative">-0.28%</bg-quote>
   Edge less.</p> <p>US Dollar DXY,
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210598269/delayed" class="negative">-0.31%</bg-quote>
   The yield on the 10-year Treasury TMUBMUSD10Y, while lower, was
    <bg-quote field="percentchange" format="0,000.000%" channel="" class="">0.811%</bg-quote>
   Climbed to 0.81%.</p> <p><strong>Chart</strong>
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   The bad news is that the percentage of intensive care unit beds with COVID-19 patients in the United States is increasing.  According to analysis by Evercore ISI, the good news is that the percentage is still not near crisis-level potential. </p> <p><strong>Random reads</strong></p> <p>The world's first central bank digital currency - the Sand Dollar of the Bahamas, was launched.</p> <p>A parking garage, under a medieval monastery.</p> <p>Scientists believe that they have found a missing tectonic plate.</p> <p><strong>The need to know starts early and is updated until the opening bell, but sign up here to deliver it once in your email box.  The emailed version will be sent around 7:30 pm Eastern.</strong>

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