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A full-blown economic cold war between the United States and China could send stocks into a bear market, BTIG chief equity and derivatives strategist Julian Emanuel told CNBC on Tuesday.

“If this is really the start of a protracted economic cold war, multiples are coming in,” said Emanuel. He signaled a S&P 500 level of about 2,300 next year, nearly 14 percent lower than Monday’s close.

With the index already 9 percent lower than the Sept. 21 all-time intraday record, such a move would more than qualify as a bear market as measured by a drop of 20 percent or more from recent highs.

In putting forth this downside scenario, BTIG conducted an analysis of price-to-earnings ratios during the Cold War with Russia from 1960 to the fall of the Berlin Wall in 1989 to multiples from 1989 to now.

“That difference is over four multiple points,” a difference consistent with trade wars of the past, Emanuel said on “Squawk Box.” From the start of those conflicts out 12 months, the market on average has been down about 20 percent, he added.

The stock rout in October and the volatile November already knocked about 3 points off the market multiple since last year, said Emanuel.

FactSet puts the current forward 12-month P/E ratio for the S&P 500 at 15.1, below the 5-year average of 16.4 but above the 10-year average of 14.5.

“We’re still basically at historical averages. If you start drifting to that other regime, you’re talking about downside consistent with other trade wars of around 2,300 on the S&P,” Emanuel said.

The financial community has been hoping the meeting of President Donald Trump and Chinese President Xi Jinping at this week’s G-20 summit in Argentina will keep the trade war between the world’s two biggest economic superpowers from escalating.

However, ahead of that meeting, Trump told The Wall Street Journal Monday it’s “highly unlikely” he would delay a planned January tariff increase on $200 billion worth of Chinese goods from 10 percent to 25 percent. The president also renewed his threat to put tariffs on the rest of China’s imports into the U.S.

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RBS earnings Q4 2018

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Royal Bank of Scotland reported a net income of £1.62 billion ($2.07 billion) for 2018 on Friday.

Analysts were expecting a net income of £1.58 billion for the full-year, according to Reuters’ Eikon.

In terms of quarterly performance, net income stood at £286 million versus £448 million in the third quarter.

At the time, the bank said it had set aside an impairment provision of 100 million pounds to deal with economic uncertainties, including from the fallout of Brexit.

The bank warned of ongoing economic and political uncertainty and highly competitive mortgage market, along with uncertainty surrounding U.K.’s exit from the European Union.

“The U.K. economy faces a heightened level of uncertainty related to the ongoing Brexit negotiations,” RBS’ chief executive Ross McEwan said in the statement Friday.

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Allianz fourth-quarter net profit up 19 percent

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German insurer Allianz said on Friday that net profit rose 19 percent in the fourth quarter from a year earlier, in line with expectations.

Net profit attributable to shareholders of 1.697 billion euros ($1.92 billion) compares with the 1.715 billion euro profit forecast by analysts in a Reuters poll and is up from 1.427 billion euros a year ago.

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European elections May 2019 – what you need to know

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“The real challenge will be to find compromises among more than two big mainstream groups,” Florian Hense, a euro zone economist at Berenberg, told CNBC via email.

However, he highlighted that despite the upcoming split in voting intentions, pro-European parties are likely to still have the biggest share in Parliament.

“Opinion polls still suggest a two-thirds majority for the mainstream parties,” he said. “(And) even if the radicals have big plans for the EU, they lack both democratic support and a common position to deliver them.”

However, not everyone shares this opinion.

A report from the European Council on Foreign Affairs said Tuesday that anti-European parties are on course to win a third of the seats and would “frustrate activity, undermine the security and defense of Europe, and ultimately sow discord that could destroy the EU over time.”

The same think tank said that anti-European parties are likely to work together to undermine European cooperation, such as pushing for an end to sanctions on Russia.

“Overall there will be more political volatility and this will inevitably affect the quasi-automatic adoption of European Commission proposals,” Alemanno said.

Generally speaking, the European Commission is in charge of proposing laws, which are then discussed and approved by every country’s minister at European Council meetings. The European Parliament then votes on these proposals.

According to Alemanno, 95 percent of European Commission proposals are adopted by the European Parliament and the Council. Significantly more than the percentage passed by U.S. lawmakers, he added.

“We are going to witness a sort of Americanization of the European decision-making progress by having a less automatic adoption of proposals,” Alemanno said.

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