Deutsche Bank Decries Fed Driven "Doom Loop" For Equities

Is a doom loop ahead for equities as the U.S. Federal Reserve embarks on a quest to withdraw the stimulus needle from the markets?

The party for European equities in 2016 is over, a Deutsche Bank report says. “We see no further upside for European equities for the rest of this year,” a May 23 European Equity Strategy report flatly stated, noting a higher probability for a downside rather than an upside scenario with a Fed-driven doom loop to blame.

Doom loop occurs when markets sell off in anticipation of a Fed rate hike

The Fed is entering a “doom loop” again, Deutsche Bank’s European researchers Sebastian...