LIVE MARKETS-Increasing stock demand should boost prices – Deutsche Bank

ReutersJun 3, 2025 4:05 PM

All 3 major U.S. stock indexes green; Nasdaq out front, up ~0.8%
Energy leads S&P sector gainers; Comm Svcs weakest group
Euro STOXX 600 index up ~0.1%
Dollar rebounds; bitcoin up ~1.5%; crude up >1.5%; gold declines
US 10-Year Treasury yield flat at ~4.46%

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INCREASING STOCK DEMAND SHOULD BOOST PRICES – DEUTSCHE BANK

Increasing demand for stocks across various investor types is likely to boost stocks this year, with the impact of tariffs now likely to be much lower than previously thought, according to Deutsche Bank.

Analysts led by Binky Chadha said that the corporate earnings outlook has brightened as the Trump administration relents on tariffs.

“In effect, while the tariff drag in mid-April was at least in the mid-teens, it now looks to be at most in the mid-single digits. This hit is arguably well within normal variation for corporate planning,” they said. Deutsche Bank now expects EPS for 2025 to be $267, up from $240 previously.

The bank expects that if there are future negative impacts from trade levies, “we will get further relents.” With that in mind, there is plenty of room for further stock purchases, which should boost prices.

Discretionary investors are neutral stocks while systematic strategies are underweight, Deutsche said, saying that they expect overall positioning to move to moderately overweight, from moderately underweight.

Corporate buybacks are also expected to continue at a solid pace, “with no signs of companies going into the bunker.”

Deutsche Bank expects the S&P 500 .SPX to reach 6,550 by year-end, up from 5,961 today.

(Karen Brettell)

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