Deutsche Bank: how signals to buy shares look like
Market sends contradictory signals about the state of the U.S. economy, so before buying shares it's better to wait for the signal from the bond market, write experts of Deutsche Bank.
Credit spreads are taken into account U.S. Manufacturing PMI (ISM Manufacturing PMI) in prices at a level just above 50, which means economic growth. At the same time, the dynamics of S&P 500 stock index suggests that the above indicator is closer to the level of 45, which is the boundary value between growth and decline, experts write in Deutsche Bank.
The yield of 10-year trader's indices shows ISM Manufacturing PMI below 40, which indicates a clear economic downturn. Therefore, bank experts advise investors to wait for improvement in the bond market before buying shares.
On March 25, Deutsche Bank increased the number of shares in the portfolio to neutral, but it stopped there, because further development of events strongly depends on the dynamics of the coronavirus pandemic and the corresponding reaction of the authorities.