RBS’s Bob Janjuah may be one of the most bearish analysts of the past two years, but his most recent call is almost threatening.
Bob, the Royal Bank of Scotland’s Credit Strategist has issued a global stock and credit crash alert and is predicting an almost 30% decline in the S&P 500 index by September.
“A very nasty period is soon to be upon us – be prepared.”
“Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point.”
His main points argue of the tight spot that the Fed and ECB have put themselves in regarding inflation. However they are not calling for an overnight crash or any move around the end of June Fed rate decision.
“RBS expects Wall Street to rally a little further into early July before short-lived momentum from America’s fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.”
This seems to coincide with the prime earnings period, specifically with retail and consumption related stocks.
I could not agree more with the timing, however the size of the move seems a bit questionable to me. A 30% move in the S&P 500 index within 2 months is almost unfathomable.
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