Deutsche Bank: 'April Showers Brought May Flowers. Watch Out For June Thunderstorms'

In a report published Monday, Deutsche Bank strategist David Bianco offered investors 10 key themes heading into the summer months. "S&P reached a new high of 2130 last Thursday on an 18 trailing PE, the highest since 2010 despite anemic EPS growth expected this year," Bianco wrote. "Both EPS and GDP are struggling to expand in 1H, putting the burden for a decent year on 2H. A 2H rebound is likely, but trend growth is very uncertain." Here are Bianco's 10 themes heading into the summer. 1. Bianco is expecting the Federal Reserve to implement a rate hike in September on falling unemployment even if GDP growth remains low. 2. Bianco is expecting further U.S. dollar appreciation with the euro trading at parity by year-end if Fed hikes appear likely to stay low and plateau at 2 percent in 2017. 3. Long-term yields could rise to around 2.8 percent this summer on strong job reports, but is expected to stabilize if the dollar climbs and unit labor costs don't accelerate. 4. U.S. GDP is expected to see a "moderate" bounce to the 2.0 percent to 2.25 percent levels. 5. The price of WTI oil prices will "drift down" in the near-term and WTI will be "capped' at $70 through 2016 provided there are no "geopolitical flare-ups." 6. It is yet to be seen if Europe is prepared to "pull the plug" on Greece if no agreements are reached by the end of June. 7. A U.S. Supreme Court decision on subsidies is expected in June and if disallowed the Administration will need to turn to Congress to pass a law allowing such subsidies and this will open the door to other ACA modifications including a possible foreign earnings repatriation holiday along with this legislation. 8. It is doubtful President Obama will order "boots on the ground" in Iraq again to combat ISIS. The topic will remain a "problem" for the administration. 9. Emerging market deceleration seems "likely" to continue and moderate global growth which will create "vulnerability to shocks." 10. By late 2015 a republican favorite is likely to emerge and raise uncertainty on many existing policies including corporate taxes, healthcare, banks, energy, the Federal Reserve and the dollar.