Sam Boughedda
Published 30.11.2025
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Investing.com - Deutsche Bank is preparing its clients for a volatile yet opportunity-filled year ahead, stating that "2026 promises to be anything but boring."
Analyst Jim Reid argued in a note that "the rapid investment and adoption of AI will continue to dominate market confidence," adding that given the speed of technological change, "it is hard to believe that this will not translate into significant productivity gains in the future."
However, Deutsche Bank warned that "markets could swing sharply between boom and bust narratives" and said that investors should "not expect a decrease in volatility."
Although the bank's economists and strategists are "broadly positive for 2026," Reid highlighted an outstanding forecast: "The 8,000-point year-end target for the S&P 500 from our U.S. equity strategist - our most optimistic analyst - is remarkable given his strong track record."
Deutsche Bank expects global growth in real terms to reflect that of 2024 and 2025, but with changing drivers.
It indicated that "it is projected that the United States will accelerate again" as trade uncertainty decreases, tax cuts boost revenues, and growth extends "beyond AI-related investments." Germany, after years of weakness, is "positioned for one of the most significant rebounds among major economies thanks to the recently unleashed fiscal stimulus."
The analyst highlighted that inflation continues to normalize but has not returned to pre-pandemic levels. Deutsche Bank expects the Fed to make "only two additional cuts before pausing."
Meanwhile, AI remains central, with stock strategists forecasting an S&P 500 EPS of $320 and a year-end target of 8,000, while the dollar's bullish streak is expected to continue "fading."
