# Deutsche Bank: Equity bear market rally will stretch into 2023, dollar weaker
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-28
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Deutsche Bank: Bear Market Rally to Continue in 2023
Meta Description: Learn about Deutsche Bank's prediction for the stock market rally and looming recession in 2023. Get insights on equity markets and economic trends.
URL: https://financedigest.com/deutsche-bank-equity-bear-market-rally-will-stretch-into-2023-dollar-weakerhtml

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LONDON (Reuters) – A bear market rally in equity markets will continue into next year before slumping as a recession in the world economy takes hold, Deutsche Bank said in its world economic outlook published on Monday.

The German bank said it expected the S&P 500 to rally to 4,500 in the first half of next year and then fall back.

The broadest measure of U.S. [stocks closed at around 4,026 in Friday and has rallied](https://www.financedigest.com/asian-stocks-rally-as-bank-jitters-calm-alibaba-lifts-mood.html "Asian stocks rally as bank jitters calm, Alibaba lifts mood") roughly 15% from a low hit in October.

In its 2023 outlook, Deutsche said a recession was likely to take hold from mid-year and would also be felt in [credit markets](https://www.financedigest.com/fico-and-efl-partner-to-extend-access-to-credit-for-unscoreable-consumers-and-entrepreneurs-in-multiple-markets.html "FICO and EFL Partner to Extend Access to Credit for “Unscoreable” Consumers and Entrepreneurs in Multiple Markets") where U.S. high [yield spreads](https://www.financedigest.com/german-yields-steady-spreads-tighten-after-recent-repricing.html "German yields steady, spreads tighten after recent repricing") should widen to 860 basis points by end-2023, and euro-denominated high yield spreads should reach 930 bps.

An end to the U.S. tightening cycle and a recession was [viewed as more positive](https://www.financedigest.com/lumen-registers-increased-views-and-more-positive-response-to-ads-using-seenthis-technology.html "Lumen registers increased views and more positive response to Ads using SeenThis Technology") for Treasuries, with the 10-year yield expected to ending 2023 around current levels at 3.65%.

German Bunds were seen underperforming, however, with 10-year yields moving to 2.60% from around 1.96% now

Finally in FX, we see a reversal in the dollar’s upswing, with euro/dollar strongly moving back above 1.10, likely [reaching 1.15 by late 2023,” Deutsche](https://www.financedigest.com/deutsche-telekom-reaches-majority-stake-in-t-mobile-u-s-ceo.html "Deutsche Telekom reaches majority stake in T-Mobile U.S. – CEO") Bank analysts said.

On oil, they added that supply disruptions could temporarily lift Brent crude [prices to $100 in the first quarter of next year](https://www.financedigest.com/hong-kong-home-prices-drop-15-6-in-2022-snap-13-years-of-gain.html "Hong Kong home prices drop 15.6% in 2022, snap 13 years of gain"), before declining to $80 by year-end.

(Reporting by Dhara Ranasinghe, editing by Karin Strohecker)


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