Global economic conditions will shift next year and that's going to flip which markets and sectors underperform, according to the chief strategist of UBS Investment Bank. Bhanu Baweja told CNBC's "Squawk Box Europe" on Wednesday that between one-third and half of the countries the bank covers globally are facing a recession. "It's an inch deep but it's a mile wide," he said of the expected recession.
But the issue next year will be earnings, Baweja said, particularly given the recessionary headwinds. He expects returns in equities next year to be "pretty ordinary," given competition from high bond yields, but he sees U.S. stocks outperforming European ones. "Life's not zeros and ones and black and white, but if the bulk of the problems next year are going to be [earnings], then Europe is more in harm's way than the U.S," Baweja said.
How short are they
You all are praying for a recession