Deutsche Bank notes a dangerous gap between equity and credit markets in the US

German bank Deutsche Bank has warned of a serious gap between the US equity and credit markets, pointing to divergent risk assessments between these sectors. The optimism in the stock market contrasts with much tighter conditions in the credit market, where investors are receiving signals of increased risks. The Bank forecasts that the situation may deteriorate, leading to an increase in spreads on high-yield bonds in the coming year.

Source - https://incrypted.com/deutsche-bank-zajavyl-ob-opasnom-razryve-mezhdu-rynkamy/

Analysis of the situation shows that the consumer credit market is facing an increase in delinquencies, which may affect companies with a significant debt burden. Deutsche Bank suggests that rising capital costs could lead to a reduction in investment and difficulties in refinancing. Observations of the markets show the possibility of a sudden correction and capital allocation, creating risks for financial institutions.

Going forward, the market may experience increased volatility in the coming months, especially for stocks with high valuations. Deutsche Bank urges investors to be prepared for possible adjustments, which could range from mild changes to sharp falls as credit pressure tightens. Regulators are already monitoring this situation in the context of potential actions to address threats to financial stability.