David Bianco and the equity strategy team at Deutsche Bank think there could be another big rally in stocks.
And then comes a big sell-off.
In their latest long-term update on the S&P 500, Bianco’s team argues that another 25% rally could be coming to the stock market that will last into 2018.
This rally, Deutsche Bank argues, would send the S&P 500 to near 2,500 from the 2,050 level it trades near right now.
After this rally, however, the party will end with the next bear market — defined as a 20% decline from highs — erasing all of the additional gains from this cycle.
Said another way, stocks will probably rally from here, and then after a few years end up right back where we are now or worse.
Enjoy it while it lasts, I guess.
Here’s the outline from DB: