U.S. stocks are sitting at a critical point and the S&P 500 index is set to drop by up to 10 percent before year-end, according to Nomura's strategist and resident "perma-bear", Bob Janjuah.
Speaking to CNBC on Monday, Janjuah, who is Nomura's senior independent client advisor, pointed to Friday's closing price of 2,141 for the U.S. stock index and said the level was a marker that "triggers me to think about where we may be headed."
In a note issued last Friday, Janjuah highlighted volatility as a sensible play in the next six to eight weeks, but also acknowledged on Monday's Squawk Box Europe "You may want to sit more passively and buy the dip for the rally into year end."
Janjuah's comment refers to his expectation of a short-lived relief rally regardless of which U.S. presidential candidate sweeps to victory once the votes are counted after November 8. Yet despite seeing potential for this limited equities bounce following the end of a dysfunctional U.S.election campaign, Janjuah's medium-term outlook is notably more cautious.
"The really hard work begins next year with the data and the new President," he said.