A sheepish Scott Wapner dared to ask DoubleLine’s Jeffrey Gundlach an open-ended question about the stock market, and we suspect the response he got was far from what he wanted to hear.
“I’m pretty sure this is a long-term bear market for stocks…S&P is headed to new lows”
“We’ve had pretty much all of the variables which characterize a bear market,“
Other highlights from Gundlach include:
- I think we’ll ratchet up tariffs
- Short term, high quality bonds the way to go in 2019.
- 2019 is all about Capital preservation.
- Worst thing to do is herd into S&P passive fund.
- Sees bond yields still moving higher on supply.
- Mueller, House probes are a market negative.
- Sees a weaker dollar ahead.
But from the moment Gundlach started dropping truth-bombs, the market was monkeyhammered…
All the major indices rolled over…
Additionally, Gundlach says the Federal Reserve shouldn’t raise interest rates when it meets this week, citing concerns about the bond market and expectations that a slowing economy may require policy reversals in 2020.
“I don’t think they should,” Gundlach said in the interview on CNBC. “The bond market is saying there’s no way the Fed should be raising interest rates.”
The Eurodollar curves are priced for extreme dovishness, but stocks for now remain hopeful that a dovish Powell will send stocks higher…