Jeffrey Gundlach’s take on markets

“Bond king” Jeffrey Gundlach shared his views regarding the Fed, markets, recession, and strategies to hedge against the slowdown during a DoubleLine investor webcast on June 13. He suggested that this year has been the opposite of last, mainly because bitcoin, stocks, bonds, and gold have all been making money. Equity markets were at a high at the end of April until Donald Trump’s May 5 tweet revived US-China trade tensions and changed equities’ direction. Year-to-date, the S&P 500 (SPY), Dow Jones Industrial Average (DIA), and NASDAQ Composite (QQQ) have returned 15.7%, 12.1%, and 18.4%, respectively.

Gold, however, has started gaining bids as geopolitical tensions have escalated and the SPDR Gold Shares ETF (GLD) has returned 4.4%. Bitcoin (BTC) has reached a 13-month high, boosted by news that Facebook (FB) is looking to create its own cryptocurrency. In January, Gundlach predicted that Bitcoin could easily rise 25% this year, but he still recommended staying away from it.

Stock market peaking?

During the June 13 webcast, Gundlach also said that since mid-2018, the S&P 500 (SPY) has outperformed major tech stocks (SMH), which he thinks will mark the peak of the stock market. Despite markets rallying this year, Gundlach has maintained that we are in a bear market. His definition of a bear market differs from the technical definition, which describes bear markets as happening only when stocks fall 20% from recent peaks.

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