RBS: Sell Almost Everything

For investors hoping that global markets can bounce back from their weak start to 2016, RBS analyst Andrew Roberts has some bad news. In a new report, Roberts says that that things will get much worse from here and urges investors to “sell (almost) everything.”

Here’s a breakdown of Roberts’ themes for the investment world in 2016.
• Bearish China
• Bearish commodities
• Downside in oil to $16/bbl
• Lackluster global growth/widening of global output gap
• Global currency wars
• Most emerging markets (other than India and Eastern Europe) will underperform
• Automation will continue its expansion and will ultimately replace up to half of all jobs in the developed world
 

“We suspect 2016 will be characterized by more focus on how the exiting occurs of positions in the 3 main asset classes that benefitted from QE: 1) EM 2) credit, 3) equities,” Roberts explains.

Related Link: Jefferies Lowers Oil & Gas Price Forecasts

RBS expects 10-20 percent downside to global equities is likely.

So far this year, most markets are off to a rough start, with the SPDR S&P 500 ETF Trust SPY, the United States Oil Fund LP (ETF) USO, the iShares MSCI Emerging Markets Indx (ETF) EEM and the iShares iBoxx $ High Yid Corp Bond (ETF) HYG all trading down in early 2016 trading.

Disclosure: the author holds no position in the stocks mentioned.