Eurozone’s party is over: EU stock market could CRASH AND BURN, Deutsche Bank warns

Friday, August 4, 2017
By Paul Martin

THE eurozone could be in for a brutal stock market crash, as the outlook for the economy darkens, Deutsche Bank has warned.

Fri, Aug 4, 2017

Investors should ignore recent economic data, that has been better than expected, because it has reached its peak, Germany’s biggest bank said.

Instead people should focus and prepare for the future, which looks to be far less rosy, according to a Deustche analyst.

In a stark alert, Sebastian Raedler, European equities analyst, compared the eurozone to a party that is coming to an end.

He told CNBC: “If everything is as good as it gets then you have to position yourself for a softening.”

Mr Raedler added: “While the investor’s psychology is always (tempted to think) the markets have gone up by 25 per cent, banks have outperformed up 30 per cent in the backdrop, then you say OK they have done so well, surely I want to be part of that party?

“But it is really like coming to a party at four in the morning … Everybody is already drunk and the question is, is that the moment to get yourself ready for action or is that the time to pull back?

“We think it is time to pull back.”

Unemployment in the eurozone has recently dropped to a 10-year low, while growth has finally picked up to levels not seen since 2011, recovering from its 2012 crisis.

At the same time, the euro has reached its highest level against the US dollar in around two and a half years.

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