Jeffrey Gundlach said Tuesday that the worst is still not over for the stock market, after a brutal quarter that had left the Dow Jones with its worst decline in the first three months of a calendar year of its 124 years of history .
Speaking during a webcast, the founder of DoubleLine Capital said that the stock market remains dysfunctional from his point of view, indicating that the market could record a more sustainable trough, once the March 23 nadir for stocks removed .
Dow Jones industrial average
DJIA,
March 23 closed at 18,591.93, its lowest closing since November 9, 2016, which left it more than 37% lower than its highest closing history established in February. The S&P 500
SPX,
on the same day, closed at 2,237.40, its lowest closing since December 6, 2016, marking a decline of almost 34% from its record.
From that point on, the indices then started a rebound which saw the Dow Jones record its biggest three-day gain since 1931, and many strategists have speculated that the worst could be over for stocks after President Donald Trump signed more than $ 2 trillion in relief last week, and the Federal Reserve deployed a barrage of stimulus packages to ease parts of the financial market.
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Gundlach hypothesized that the market could fall further. I would bet it will be deleted, he said, referring to the March nadir.
One day after the March trough, the CEO of DoubleLine speculated that the S&P 500 could increase to 2,700 before the coronavirus rescue program was enacted.
The S&P 500 peaked intraday on March 24 at 2,637.01, but has declined mainly since then.
In early March, the Los Angeles bond fund manager offered what turned out to be wise advice, advising investors to stay in cash during the coronavirus pandemic.
He advised investors at the time to pay attention to the economic data that will reveal the damage caused by COVID-19, which has so far caused an almost global shutdown as governments around the world try to mitigate the spread of the deadly infection, which has been contracted by more than 850,000 people and killed 42,000 to date, according to data compiled by Johns Hopkins University.
Gundlach said looking at the direction of weekly US unemployment demand data, as well as consumer confidence, could be helpful in seeing how households are the backbone of the economy.
The weekly jobless claims reported on Thursday were the worst in history, reaching 3.28 million people claiming unemployment benefits.
Trump attempted to point out to the Americans on Tuesday that the road ahead will be difficult, noting that we are facing two very, very painful weeks during a daily press briefing on coronaviruses. This is going to be an approximate two week period, said the president.
On Tuesday, stocks struck by uncertainty surrounding the disease ended sharply lower, the Dow marking its worst quarterly performance since 1987, the S&P 500 index marking its largest quarterly decline since 2008 and the Nasdaq Composite Index
COMP,
recording its worst quarterly decline since the fourth quarter of 2018.
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