(Invest Record) Jeffrey Gundlach said in a webcast with investors on Tuesday that the market was acting “somewhat dysfunctionally” and that banks’ projections of a quick US economic recovery were highly optimistic, Reuters reported.
The S&P 500 index collapsed into a bear market this quarter, losing 12.5% in March in an environment of unprecedented economic uncertainty due to the coronavirus pandemic. Previously, its biggest monthly decline was a 16.9% slide in October 2008.
The webcast, meant to address the economic effects of the coronavirus pandemic, was called “Tale of Two Sinks,” a reference to the 2008 financial crisis and the current one.
The Wall Street bond king said he thinks the March lows will be eclipsed in April as economic uncertainty continues to rile investors. “I think we are going to get something that resembles that panicky feeling again during the month of April,” Gundlach, the bond manager and cofounder of DoubleLine Capital, told investors, according to Reuters.
Gundlach forecast that the market would “get back to a better place, but it’s just not going to bounce back in a V-shape back to January of 2020,” Reuters reported.
Meanwhile, speaking to CNBC on Tuesday, Howard Marks, the billionaire investor and cofounder of Oaktree Capital, outlined a negative outlook due to economic uncertainty but said investors could do some buying as “things have gotten cheap enough.”
However, Marks urged investors to be cautious and said his approach “is not black or white, buy or sell.”
Struggling companies like Boeing and ExxonMobil have induced the drag of the Dow Jones industrial average. Major US indexes declined on Tuesday to end one of the worst first quarters in history, with the Dow having tumbled 23%.
