Headline: Deutsche Bank Reverses U.S./Europe Stock Call to Neutral

Deutsche Bank (DB) has reversed its "overweight U.S. stocks, underweight European stocks" recommendation, shifting to a neutral stance on Monday, June 15, 2026. The bank profited from the trade after U.S. equities gained approximately 6% over European counterparts since the US-Iran conflict, citing the diminishing impact of three key factors that previously favored U.S. markets. DB strategists, led by Maximilian Uleer, noted that the widening U.S.-Europe growth gap, the S&P 500's high tech weighting, and lower U.S. sensitivity to the Iran conflict are "becoming less important." The U.S. and European profit growth gap is projected to narrow significantly to about 8 percentage points in Q2 2026, down from 18 points in Q1. This comes as U.S. economic data surprises cool and Eurozone indicators improve, while European firms benefit from reduced dollar drag and a 50% year-over-year rise in Brent crude prices boosting energy earnings. The report also highlighted potential crowding in U.S. tech stocks and increased supply, which could curb future momentum. Furthermore, a potential US-Iran peace agreement and reopening of the Strait of Hormuz would likely favor European manufacturing and consumer sectors, which have higher weighting in EU markets and stronger correlation with oil prices.