Billionaire bond king Jeff Gundlach said the stock market will likely fall from its 'lofty' perch despite 'Superman' Jerome Powell's policies
- Billionaire "bond king" Jeffrey Gundlach expects the stock market to fall from its "lofty" perch as he warned of corporate credit downgrades and a rise in white-collar layoffs on Tuesday.
- Gundlach said traders think the Federal Reserve chairman Jerome Powell is "Superman," and he is expected to keep the fed fund rates at zero for the next two years.
- His comments came ahead of a much-anticipated key policy meeting on Wednesday that will determine future guidance, justify main street lending facilities, and is expected to touch upon the US protests.
- "I certainly do expect that Jay Powell would follow through on controlling the yield curve should the 30-year rate really get unhinged," Gundlach said.
The stock market is likely to fall from its "lofty" perch alongside waves of corporate credit downgrades and white-collar unemployment, Jeffrey Gundlach, founder and chief executive of DoubleLine Capital, said in a webcast on Tuesday.....MORE
Describing the market as overinflated, he said he thinks the market falling is a "pretty good bet."
"If you think that the stock market is going to fall from its fairly lofty perch right now - which I think is a pretty good bet," he said, adding that such investors should bet on increased dollar strength.
Gundlach, the billionaire "bond king" of Wall Street said as employers examine the value of white-collar workers, a "wave of more higher-end unemployment" would hit those who make above $100,000 a year.
Over 11 weeks, total US jobless claims hit a record 43 million which means more than one in four working Americans lost a job during the coronavirus pandemic.
"A lot of times it's not the earthquake, it's the fire," Gundlach said on the webcast.
Gundlach continued by saying that the period of working from home enforced by the virus has exposed the people in his business who shy away from hard work
"What people may have learned for white-collar services jobs in particular during the work-from-home lockdown situation ... I kind of learned who was really doing the work and who wasn't really doing as much work as it looked like on paper that they might have been," he said....
Ditto.
