I realize some of you believe we’re in some stock market Renaissance, but it hasn’t gone anywhere in 18 months. Moreover, we’re still down for the year.
Jeff Gundlach touched upon that and said he thinks there’s a 50/50 chance of a June hike. He’s been an arch opponent to the Fed banter and rate hike threats, citing a sundry of reasons for the Fed to not hike, such as the economy sucks–yadda, yadda, yadda.
“The market is not incredibly healthy,” Gundlach said in a telephone interview, noting recent corporate earnings have come in weak. Gundlach, who oversees $95 billion at Los Angeles-based DoubleLine, said the S&P 500 index “has gone nowhere in the past 12 months to 18 months.”
On the Federal Reserve, Gundlach said it is still 50/50 odds that the U.S. central bank will raise interest rates in June. He said many Fed officials are “dying to raise rates,” but that it is Fed chair Janet Yellen’s opinion that matters the most.
“All that matters is Yellen. She is still there. I feel like we are back in December again, where everyone thinks that there is a super secret that some Fed officials have this knowledge that the economy is really good.”
Jeff is boss hog, manager of $95 billion, the new bond King.
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This market is range-bound at the top of a larger and longer range. Breaking out of it requires something fundamental. Technicals do not get fund managers to allocate billions of dollars to stocks at higher prices. The only fundamental thing on the radar is how many hikes will we endure for the balance of this year. The pain trade is down, like always.
Welcome, Devil Dog Gundlach. Here is a fleece vest for you, which is awarded to each Devil Dog.