European stocks poised for a lower opening as investors anticipate Fed interest rate decision
European Market Outlook: European stocks are expected to open lower as investors await the U.S. Federal Reserve's interest rate decision, with the U.K.'s FTSE, Germany's DAX, France's CAC 40, and Italy's FTSE MIB all projected to decline slightly.
Federal Reserve Meeting: A quarter-point interest rate cut is anticipated, bringing the federal funds rate to a range of 3.75%-4.00%, with expectations of further cuts in December and January.
Earnings Reports: Major companies like Alphabet, Meta Platforms, and Microsoft are set to report earnings, with Apple and Amazon following on Thursday, drawing significant market attention.
U.S.-China Trade Relations: Trade tensions appear to be easing ahead of a meeting between President Trump and President Xi Jinping, with Trump indicating a potential reduction in tariffs related to fentanyl.
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- New Depositary Appointment: Deutsche Bank has been appointed as the successor depositary bank for Swisscom AG's American Depositary Receipt program, marking a significant expansion in Deutsche Bank's management of cross-border equity structures and expected to enhance its influence in global markets.
- Company Overview: Swisscom AG is a leading information and communications technology company, 51% owned by the Swiss Confederation, employing nearly 20,000 people, and providing mobile, internet, and TV services, highlighting its critical position and market share in the industry.
- Service Range: Deutsche Bank specializes not only in managing American and Global Depositary Receipts but also offers trustee, agency, and related services to corporations, financial institutions, and hedge funds worldwide, further solidifying its diversified capabilities in the financial services sector.
- Market Impact: This appointment is expected to enhance Deutsche Bank's depositary receipt business in the U.S. market, likely attracting more international investors to Swisscom AG, thereby potentially driving its stock price and market performance upward.
- Gold ETF Performance: The SPDR Gold ETF has surged 25% year-to-date, outperforming Palantir Technologies (down 12%) and Nvidia (up 3%), and has exceeded these AI stocks by at least 50 percentage points over the last six months, highlighting gold's strong appeal as a safe-haven asset.
- Hedge Fund Accumulation: Billionaire hedge fund managers Israel Englander and Ken Griffin increased their holdings in the SPDR Gold ETF by 104,900 shares and 255,100 shares respectively in Q3 2025, with Griffin also purchasing call options, indicating their confidence in the gold market and strategic portfolio adjustments.
- Gold Price Dynamics: Gold's low correlation with stocks and bonds makes it an ideal choice for investors during periods of global tension and economic uncertainty, as historical data shows that gold can provide effective hedging during significant market drawdowns.
- Future Price Expectations: Several financial institutions project gold prices to reach between $5,300 and $6,000 per ounce by 2026, and despite mixed opinions on the geopolitical and economic turmoil caused by Trump's policies, the overall trend remains bullish, suggesting investors should consider increasing their exposure to gold ETFs to mitigate potential risks.
- Strong ETF Performance: The SPDR Gold ETF has surged 25% year-to-date, significantly outperforming Palantir Technologies' 12% decline and Nvidia's 3% increase, highlighting gold's strong appeal as a safe-haven asset.
- Market Benchmark Outperformance: Over the past six months, the SPDR Gold ETF has outperformed the S&P 500 by 52 percentage points, indicating a sustained increase in investor demand for gold amid rising economic uncertainty.
- Inflation Hedge: Gold is considered a safe asset due to its low correlation with stocks and bonds during geopolitical tensions and economic crises, with historical data showing that gold provides effective hedging during major market drawdowns.
- Future Price Predictions: Several financial institutions forecast gold prices reaching between $5,300 and $6,000 per ounce by 2026, despite the current price being $5,400, reflecting strong market demand for gold, particularly in light of economic turmoil triggered by Trump administration policies.
- Raid Investigation: German authorities have raided Deutsche Bank's offices in Frankfurt and Berlin as part of a money laundering investigation linked to the now-sanctioned Roman Abramovich, highlighting regulators' zero-tolerance stance on financial crimes.
- Cooperative Stance: A Deutsche Bank spokesperson confirmed the presence of prosecutors at their offices and stated that the bank is fully cooperating with the investigation, demonstrating its commitment to compliance and respect for legal processes.
- Historical Transaction Review: Prosecutors noted that Deutsche Bank previously maintained business relationships with foreign companies suspected of being used for money laundering, which could negatively impact the bank's reputation and future operations.
- Market Reaction: This raid may lead to a decline in investor confidence in Deutsche Bank, affecting its stock performance, especially against the backdrop of an upcoming earnings report, potentially impacting market expectations for its future profitability.
- Net Interest Income Outlook: Deutsche Bank anticipates its net interest income will rise to approximately €14 billion in 2026, up from €13.7 billion in 2025, driven by targeted growth in deposits and loans, although this is below the market consensus of €14.6 billion.
- Full-Year Revenue Growth: The bank expects its full-year revenue to climb to around €33 billion in 2026, an increase from €32.1 billion last year, reflecting stability in revenue structure despite falling short of the consensus estimate of €32.8 billion.
- Expense and Loss Projections: Noninterest expenses are projected to slightly exceed €21 billion in 2026, aligning with previous guidance, while provisions for credit losses are expected to trend moderately downwards compared to 2025, indicating improved risk management.
- Dividend Policy Adjustment: Deutsche Bank plans to increase its payout ratio to 60% starting in 2025, complemented by modest growth in dividends per share and share buybacks, demonstrating a commitment to shareholder returns and confidence in future profitability.
- Earnings Beat: Deutsche Bank reported a Q4 2025 GAAP EPS of €0.76, exceeding expectations by €0.21, indicating strong profitability and market confidence.
- Revenue Miss: Despite a 7.1% year-over-year revenue increase to €7.73 billion, it fell short of expectations by €20 million, reflecting intensified market competition and economic uncertainty.
- Significant Cost Control: Noninterest expenses decreased by 15% year-over-year to €5.3 billion, demonstrating the bank's effective cost management and enhancing profitability.
- Shareholder Return Plan: Management plans to propose a €1.00 dividend per share at the 2026 AGM, up approximately 50% from €0.68 for 2024, reflecting confidence in future profit growth.










