BTIG warns stocks will plunge 15-20% from current levels, as US protests add to the market's 'menu of uncertainties'

Emanuel said on CNBC Monday that small cap indexes are particularly sensitive to a correction and it is "time for the market to reassess the uncertainty to the economy."
"The environment is more volatile now, so what we are saying is envision yourself as an investor with a portfolio down 15-20%."
Widespread protests have broken out in the US in the past week after the death of George Floyd in police custody. Floyd, who was black, died after a white officer knelt on his neck for eight minutes.
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Wall Street brokerage BTIG is warning investors to brace for a slump of 15 to 20% in stocks going forward, adding that mass US protests in recent days has added to the "menu of uncertainties" facing markets in 2020.

Julian Emanuel, managing director and chief equity and derivatives strategist at brokerage BTIG said in a CNBC interview Monday : "We have a lot of risks, we have a fragile recovery we are not even sure we had a recovery yet."

"It's probably time for the market to reassess the uncertainties to the economy," he added.

"The environment is more volatile now, so what we are saying is envision yourself as an investor with a portfolio down 15-20%."

Read More: MORGAN STANLEY: The market's hottest stocks are in danger of being disrupted to a degree not seen since the Great Recession. Here's how to adjust your portfolio for the coming shift. He added: "When you look at the rally of the lows in March off the small cap indexes, we think it is the time for the market to reassess the uncertainty to the economy and the social unrest in the last two days adds to that menu of uncertainties." The small-cap Russell 2000 Index has risen 43% since March's market crash. Over that same period, the S&P 500 is up more than 30%, and is just over 10% below its all-time high, which it hit in February. Big gains in small cap stocks have given rise to hopes that a broader recovery in equity markets may persist. Despite huge gains in the past two months, markets face a cocktail of risks from the economic downturn brought about by the coronavirus pandemic, to escalating US-China trade tensions, and now widespread protests in the US. Protests erupted last week after the death of George Floyd while in police custody in Minneapolis. Floyd, who was black, died after a white police officer knelt on his kneck for more than eight minutes. While most protests are peaceful, some have erupted into civil unrest including violence, destruction of property and looting. This prompted President Trump to threaten to deploy troops on the streets to quash unrest. Experts think while US-China has dominated markets in recent days, the protests could undermine consumer confidence, and even spark a second wave of coronavirus cases which may ultimately feed into stocks. Read More: BANK OF AMERICA: Buy these 13 under-the-radar tech stocks poised to outperform amid flaring China tensions and lasting pandemic damage While 2020 in the markets looks bleak in Emanuel's, he view struck a much more optimistic note for 2021. "Our view is that you get into the fall and you get into early next year, likely there's enough time for the economy to find its footing, for there to be medical advances and we can envision new all-time highs at some point in 2021, unquestionable," Emanuel said. NOW WATCH: Tax Day is now July 15 this is what it's like to do your own taxes for the very first time See Also: BANK OF AMERICA: Buy these 13 under-the-radar tech stocks poised to outperform amid flaring China tensions and lasting pandemic damage The European Union's $826 billion stimulus plan to battle the coronavirus is 'too small and too late,' analysts say An elite 'ultragrowth' investor explains how he's beating the market in 2020 and analyzes 4 stocks he thinks will help him stay on top for the next 5 years