Gundlach sees stocks falling past the lows reached in March

Gundlach sees stocks falling past the lows reached in March
The bond manager predicts unemployment will rise to 10% and said the current economy resembles a 'depression'
MAR 31, 2020
By  Bloomberg

The S&P 500 Index is likely to surpass its March lows in April as economic uncertainty further riles investors, according to bond manager Jeffrey Gundlach.

“I think we’re going to get something that resembles that panicky feeling again during the month of April,” Gundlach, chief investment officer for DoubleLine Capital, said Tuesday during a webcast on the market and economic impact of the coronavirus pandemic.

The S&P 500 fell 12.5% in March, its worst monthly performance since October 2008. The gauge’s decline ended the longest bull market in history.

The U.S. is likely to follow Japan, Europe and emerging economy stock markets that haven’t rebounded to highs reached more than a decade ago, according to Gundlach.

“It won’t be back to where it was prior for a long time to come,” he said, “particularly on a real basis.”

Gundlach also said that it will take time — and sacrifice — for the U.S. economy to eventually grow stronger.

“We will get back to a better place, but it’s just not going to bounce back in a V-shape back to January of 2020,” he said.

Among his other comments:

 •   Projections by major banks that the U.S. economy will quickly recover from the coming recession are too optimistic.
 •   The current economy resembles a “depression.”
 •   The U.S.’s economic and monetary stimulus will likely reach $10 trillion.
 •   Unemployment will rise to 10%.
 •   The dollar is likely to weaken.

In his prior webcast on March 17, Gundlach said there may be a 90% chance of a U.S. recession this year, the national debt could grow to $30 trillion in two to three years and investors should prepare for “en masse” corporate debt defaults and downgrades. He later attacked government bailouts as plans to backstop “greed and mismanagement,” according to a March 19 Twitter post.

https://twitter.com/TruthGundlach/status/1240847084531531776

The $51 billion DoubleLine Total Return Bond Fund, Gundlach’s mortgage-focused flagship fund, lost 1.3% this year through Monday and returned an annual average of 2.6% over five years.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave