Deutsche Bank-Thematic Research Monthly ideas – Who’s afraid of seasonali...-117096827

2025 13:53:05 GMT2025 13:53:05 GMT0Deutsche Bank Research | Monthly ideas: Who’s afraid of seasonality? | August 2025IMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.Deutsche BankResearchMonthly ideas: Who’s afraid of seasonality?August 2025Luke TemplemanThematic Research StrategistLuke.Templeman@db.com+44 207 541 0130Galina PozdnyakovaResearch AnalystGalina.Pozdnyakova@db.com+44 207 547 49941Deutsche Bank Research | Monthly ideas: Who’s afraid of seasonality? | August 2025Executive summary: Our top ideas this monthThe tumultuous reaction to last week’s US payrolls report reinforced investor expectations of a pullback in the S&P 500. This has been increasingly anticipated amidst negative seasonality and concerns about trade deals.But the more pessimistic narrative about risk assets contrasted with a more upbeat theme last week in capital markets as three M&A megadeals signalled how companies are responding to key geopolitical trends driving markets and economies through dealmaking. They helped show why risk assets aside from tech may continue to perform well even with tariffs now more firmly in place.So, this month we focus on key themes that are likely to support upward momentum in markets. Our conclusion is that these themes may resonate into the medium term and potentially become more powerful as corporates resume dealmaking and the Fed begins its rate cutting cycle. Key market-moving themes this month:• M&A: What the megadeals tell us – we look at themes emerging from the 3 megadeals announced last week and how they feed into our outlook for capital markets activity. For the US M&A, we expect the bounce-back later this year and next to be stronger than normal owning to the very depressed level of M&A during the recent period of economic uncertainty.• Has volatility been too low? – we analyse how equity volatility has been tracking relative to its historical patterns and various gauges to show that it is far from signalling investor complacency. Instead, we highlight that volatilities across asset classes have been moving more in tandem recently, potentially increasing the passthrough of shocks across markets.• Liquidity tailwinds – even with the Fed still being on hold, plenty of other central banks have been cutting rates in recent months and money supply across key economies has been growing. We highlight the implications and why this macro-driven support for risk assets may continue.• Cash is becoming more important – for both investors and corporates. We take a look at what a shorter-duration world means for capital structures and stock markets. This theme is likely to accelerate as the Fed starts cutting and the yield curve steepens further.Executive summaryM&A: What the megadeals tell usHas volatility been too low?Liquidity tailwindsCash is becoming more important13422Deutsche B