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Nov. 16, 2019, 2:49 p.m. EST

The biggest risk facing the stock market in the coming year isn’t trade jitters or the election, Deutsche Bank warns

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By Shawn Langlois, MarketWatch


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Wealth inequality is a major issue for presidential candidate Sen. Bernie Sanders.

There’s plenty for investors to get all stressed out about in the coming year, and Deutsche Bank chief economist Torsten Slok’s latest list of the 20 biggest risks will do little to alleviate those concerns.

As you can see, the potential for more trade fallout and fears over slowing growth still rank high on Slok’s list, but inequality is in the top spot:

“They are all important at different horizons,” Slok told MarketWatch on Sunday, “but a continued rise in inequality and associated political response is something investors can no longer ignore.”

Democratic presidential candidates certainly aren’t ignoring it. Increased taxes on the rich, in an attempt to narrow the divide, is a critical part of the campaigns of both Sens. Elizabeth Warren and Bernie Sanders ahead of the election.

Big-name investors have already made it clear what a President Warren could mean for markets. Billionares Paul Tudor Jones, Leon Cooperman and Steve Cohen have all talked about a nasty correction that could follow her victory.

Meanwhile, after last week’s fresh highs, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.79%  , Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.73% and S&P 500 /zigman2/quotes/210599714/realtime SPX +0.86% all dropped into the red in Monday trading.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
28,132.05
+220.75 +0.79%
Volume: 277.74M
Dec. 12, 2019 4:55p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
8,717.32
+63.27 +0.73%
Volume: 2.16M
Dec. 12, 2019 5:16p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,168.57
+26.94 +0.86%
Volume: 2.22B
Dec. 12, 2019 4:55p
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Shawn Langlois is an editor and writer for MarketWatch in Los Angeles. Follow him on Twitter @slangwise.

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