DWS: No technical bear market in US stocks, closely monitoring market volatility risks

DWS Global Chief Investment Officer Bjorn Jesch stated that despite a 7% decline in the S&P 500 index, they still believe that a technical bear market has not yet emerged. They will closely monitor the risks brought about by market volatility, especially the situation where highly leveraged investors are forced to reduce their positions. They will also keep an eye on various indicators reflecting systemic risks. Currently, the market sentiment has reversed due to the impact of Trump's trade, leading to sharp declines in US small-cap stocks, the US dollar, and cryptocurrencies. DWS expects the Federal Reserve to continue its policy as planned and not change its stance due to market panic. Their baseline forecast is that the Fed will cut interest rates by 25 basis points three times in the coming months. While the possibility of the US entering a recession cannot be ruled out, it is expected to be a mild one. The bond market has already reflected a high probability of a recession, but considering the overall economic strength and the relatively robust financial condition of the private sector, the recession is expected to be mild