A bear market
Market leaders down
However, Gundlach said during the “Highway to Hell” webcast, “The stock market was and still is in a bear market.” He also maintained that the bear market doesn’t have anything to do with the arbitrary 20% figure.
The leaders that took the markets to the top are still down ~20% from their peaks. These names mainly include the so-called FAANG stocks—Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL).
Fed’s pivot saved the markets
Gundlach believes that the Fed’s pivot from hawkish to dovish helped the markets recover, but we should again see negative returns this year—and probably a recession next year. The Fed’s hawkish stance was a major reason for the stock sell-off in the fourth quarter. With the Fed’s back-to-back comments regarding being more patient with policy tightening this year, the markets have rallied YTD.