© Reuters. FILE PHOTO: A man points at a computer screen showing stock information in this illustration photo taken in Bordeaux, France on March 30, 2016. REUTERS / Regis Duvignau / File Photo
LONDON (Reuters) – A stock market correction of 5% to 10% by the end of the year was the majority forecast in a September market sentiment poll published by. has been published Deutsche Bank (DE 🙂 on Monday, the latest sign of the market warning that the bull run for stocks will end.
According to the report, which was produced September 7-9, and which includes over 550 market experts worldwide, 58% of respondents said they expect stocks to sell off by the end of the year.
Backed by huge stimulus from central banks, stocks have risen from the lows they hit in March 2020 when the COVID-19 pandemic spooked markets and sparked a sharp drop in stocks. The world share index MSCI has almost doubled since then.
Economic growth and corporate earnings have rebounded faster than expected, but now data from the US and China suggest that the recovery may be slowing down.
COVID-19 was still seen as the greatest risk to market stability, with 53% of Deutsche Bank respondents citing concerns about new virus variants that bypass vaccines. Unexpectedly high inflation followed.
Around a third of respondents (32%) cited strong, non-existent or short-lived economic growth and a political error by central banks as risks to market stability.
The September poll also showed that belief in temporary inflation – as reported by central banks – is fading, although it still remains the consensus.
Banks including BofA, Morgan Stanley (NYSE :), Citi and Credit Suisse (SIX 🙂 last week asked clients to reduce their exposure to stocks.
BNP Paribas (OTC 🙂 said in a customer note last week that it expects it to be at its current levels by the end of the year.
"Given the risk of higher taxes and interest rates, we are broadly neutral on US equities and see more upside potential in European equities," said BNP Paribas.
Deutsche Bank also asked market experts about their intentions to return to work after the pandemic, and found that since March 2020, when the pandemic triggered lockdowns around the world, about one in five people had still not returned to their office.
In the USA, this number was even lower with every third person, said Deutsche Bank.
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