Deutsche Bank Wealth Management says market participants are forecasting earnings that the world can’t deliver.

The $239 billion money manager sees consensus expectations of a sharp rebound in earnings this year as “overly optimistic,” as it expects the pace of economic growth to slow further this year, according to Global Chief Investment Officer Christian Nolting.

Unrealistic expectations could cause higher volatility amid the U.S. election cycle and ongoing geopolitical tensions, Nolting warned. Earnings for companies listed on MSCI’s broadest measure for global equities are estimated to rise by 20% this year after having declined in 2019, according to data compiled by Bloomberg. That trend holds true for other top gauges as well.

“Earnings expectations are much higher for this year and there could be some room for volatility,” Nolting said in an interview in Singapore. “If you miss, you will be punished even more,“ he added.

Nolting recommends a more balanced allocation for this year after the MSCI All-Country World Index surged 24% in 2019. He has started to rebalance in favor of value stocks from growth and likes stocks in consumer, cyclical and industrial sectors on that theme. The gauge for global equities edged lower on Wednesday and is still up 1.4% this month.

Deutsche Bank Wealth says it still sees some bright spots in Asian equities, adding that central banks in the region have room for monetary easing, unlike the U.S. Federal Reserve and the European Central Bank.

The wealth manager is overweight on China, India and Thailand in its emerging market allocation for stocks, said Tuan Huynh, chief investment officer for Asia and Europe.

Chinese stocks can rise 10% this year amid the easing of trade tensions and relatively cheap valuations, while Thailand benefits from outsourcing of production by China, Tuan said.

In India, the continuation of reforms by Prime Minister Narendra Modi will improve the pace of economic growth, which is on track toward its lowest since 2009, he added.

This article was provided by Bloomberg News.