“ ‘I’m certainly in the camp that we are not out of the woods… I think a retest of the low is very plausible.’ ”
That’s the gloomy outlook Jeffrey Gundlach, CEO of DoubleLine, delivered to CNBC on Monday as the stock market staged a strong rally in the face of what he believes is too much optimism.
“People don’t understand the magnitude of… the social unease… that’s going to happen,” Gundlach explained. “We’ve lost every single job that we created since the bottom in 2009.”
With that in mind, he revealed that he just shorted the S&P at 2,863.
“At this level, I think the upside and downside is very poor,” he said. “I don’t think it could make it to 3,000, but it could. I think downside easily to the lows or beyond.” The S&P hit a low of 2,192 on March 23 before rebounding about 30% as the Fed rolled out its historic stimulus measures.
Earlier this month, Gundlach in a webcast warned of more selling, with a “more enduring low” on the way for the “dysfunctional” stock market.
At last check, the S&P 500 index SPX, +1.47% was up 48 points to 2,884 in Monday’s trading session, while the Dow Jones Industrial Average DJIA, +1.50% and the tech-heavy Nasdaq Composite COMP, +1.10% were also firmly in green territory.
Watch the interview: