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While a massive exit from global stocks isn’t around the corner just yet, investors should prepare for an uncomfortable summer as the focus turns to economic concerns, according to Commerzbank AG.

“It’s time to get out of equities now, not in,” Max Kettner, a cross-asset strategist at Commerzbank, said by email. “The earnings season is behind us in the U.S. and that has been the main driver why equity markets were so stable. Now with micro no longer in focus, it’s all about macro again and investors realize growth momentum is still deteriorating and they rush for the exit.”

The S&P 500 Index, which is up about 3 per cent in May, may retreat at least 5 per cent over the summer, whereas European stocks may fair better because of the euro’s weakness, Kettner said. Investors should instead switch into more conservative assets, such as defensive-sector stocks and five-year Treasury yields, he said.

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While the biggest European equities-focused exchange-traded fund, the Vanguard FTSE Europe ETF, had the largest inflow since February on Tuesday, the mood darkened around the globe Wednesday as concerns mounted that President Donald Trump’s meeting with Kim Jong Un may not happen and as Europe’s composite Purchasing Managers’ Index fell.

Angus Sippe, a multi-asset portfolio manager at Schroders, said the company has reduced its positions in equities over recent months following the rally and expects investors to switch into shorter bonds.

“The rise in interest rates, especially in short-term bonds, allows investors to be able to not reach for yield or risk at this point in the cycle,” Sippe said by phone. “I think investors are going to rotate back into bonds and especially shorter ones.”

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