Retest of market low is 'very plausible': Jeffrey Gundlach

CNBC's "Halftime Report" is joined by DoubleLine Capital CEO Jeffrey Gundlach to discuss his view of bonds and stocks amid the coronavirus pandemic.

Jeffrey Gundlach, CEO of DoubleLine, said Monday that the stock market could sell off again to retest the low in March as he believes investors are too optimistic about the economic recovery from the coronavirus pandemic.

“I’m certainly in the camp that we are not out of the woods. I think a retest of the low is very plausible,” Gundlach said on CNBC’s “Halftime Report.” “I think we’d take out the low.”

“People don’t understand the magnitude of ... the social unease at least that’s going to happen when ... 26 million-plus people have lost their job,” Gundlach said. “We’ve lost every single job that we created since the bottom in 2009.”

The so-called bond king revealed he just initiated a short position against the stock market.

“Actually I did just put a short on the S&P at 2,863. At this level, I think the upside and downside is very poor. I don’t think it could make it to 3,000, but it could. I think downside easily to the lows or beyond ... I’m not nearly where I was in February when I was very, very short,” Gundlach said.

The S&P 500 has bounced 30% off its March 23 low of 2,191.86 as investors cheered the Federal Reserve’s unprecedented stimulus measures as well as signs that the pandemic could be easing.

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[netstarr]

CNBC cut off the best part, The part where he says the fedsters are doing illegal things.

[mikenoelck]

Does anyone have a link to the full interview?

[TheEntrepreneurChannel]

They can’t hear you over the fed printer! brrrr

[grildcheez]

The market is disconnected from mainstreet so why should'nt that continue? If you can keep printing money and funding these companies into infinity why does it have to stop?

[dwr]

I was waiting for retest of lows, but then finally came to my sense that you just can't find the Fed.

[denisbaranov]

I'm a simple man. I see Jeffrey, I like.

[NicoTheChocolateLab]

The enormous FED Put rally that has occurred is so decoupled from the reality with what's been set in motion to play out in the 12-24 months. The broad participation of stocks in this S&P rally is non-existent, and the rally is primarily attributed to the rise in the FAAN(M)G stocks (6 stocks: FB; AAPL; AMZN; NFLX (MSFT); GOOG!) that now account for 22% of the market capitalization of the S&P. It may not be long before a significant correction occurs. Almost 90% of companies reporting have withdrawn forward guidance because they can't even calculate how severely their business model contraction will be. The higher the market concentration of these 6 stocks rises, the more challenging it will be for the S&P to also keep rising without more broad-based participation. 2640.75 currently represents the negative-1 standard deviation of the daily VWAP (2 years of data). Many retail-ville traders and investors have been brainwashed for the past 11 years, that corrections will always result in the indices soon back to their prior highs. Therefore, they see this virus as simply another temporary, and inconvenient event, and things will go back to "January 2020" normal in a few months. Unfortunately, the probabilities suggest there's an enormous dislocation between that cognitive dissonance-reality and the real reality that the economy has entered a downturn of unprecedented speed and severity, with most advanced economies facing their weakest performance since the Great Depression. Eventually, in the weeks ahead, the FAAN(M)G stocks will give up the ghost. They're always the last "angels" to fall. Also on an elevated forward valuation multiple, the S&P is currently trading at an all-time high with a PE of 20.5! At the all-time high of 3397.50 in February, the PE of the S&P was 19.0. So as the USA enters a Depression, stocks are now the most overvalued ever. News out this morning: "White House economic adviser Kevin Hassett says said that he expects the unemployment rate will be around 16% - 17%, and that the Q2 GDP number will be the 'biggest negative number that we've seen since the Great Depression, ' which could be in the negative 20% to 30% range." Further, this is quite the week for earnings releases, with 5 of the 6 FAAN(M)G stocks reporting. I can't tell you if it is this event or not, or when, but the S&P Futures will one day trade the untraded range of 1443.00 - 1420.00 for price discovery from 12/31/12 - 1/2/13. Likely to occur in a multi-year grind-down process similar to what occurred from 1929- 1932.

[Kn]

Gundlach: Retest of market low is "very plausible"
Powell: Hold my beer

[Ravencroft]

The FED just slowly rolled through a neighborhood, stopped at a random yard sale, bought up all the crap there, threw it into the back of their unmarked Escalade and drove off. Their prize catches were porcelain piglet cufflinks for 25$ and a teapot cozy my nanna knitted for 7.25$

[kevinlerner]

What this guy doesn't mention is that unemployment is paying these workers more than they were making at their jobs....

[hunterhamilton]

If this guy says jump off a cliff I would, last year he recommended puts on the SPY when all markets TV talking heads were blindly touting the market, I putted the SPY and raked it in around 500%. He also "casually" gave a recommendation on the TLT on the call side, that was a 800% gain.

[monkeyloven]

We taken out the low!!
Buy your gold miners, NEM, WPM, GOLD, and AEM.

[lefthandedhardright]

Trump and Powell should throw a bone to the bears, and give them a chance to get out.

[cmares]

I don't think its happening anymore, everyone was looking down, market kept grinding up... the FED has pumped this market to the moon, fundamentals haven't mattered for 10 years, they for sure don't matter now

[-sr]

And what is it with the fed asking Congress for Platinum coins in return for printing cash!!??

[ecosby]

With 30 fukin percent unemployment. Obviously the market can't maintain these numbers.

[briandoran]

Jeffie is wrong again
He said last sept there was maybe 2% left in SP500 when it was2440
That’s a year ago

[futureforever]

1) First World File Bankruptcy Chapter Are 1997, Second World Bankruptcy 2001, Third World Bankruptcy 2009, And World Had Fighting To Come Back 2016, Until Now

[charlesw]

Most important portion about this interview was the fact when he reveled at the end to the CNBC host he was 50% cash in his investments and wasn't bullish on either stocks, bonds or even Gold prices at these levels.

[ammarali]

I would be so angry if we don't test the low.