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Friday, March 29, 2024

Jeff Gundlach Says “We Are In A Bear Market”, S&P Will Take Out December Lows In 2019

Courtesy of ZeroHedge. View original post here.

Today at 4:15pm EDT, DoubleLine founder Jeff Gundlach is holding his latest live webcast open to investors and casual listeners, titled enticingly ‘Highway to Hell’, and which we assume will discuss either Brexit, the US-China trade deal, the long-term US debt picture or how this, latest asset bubble finally ends.

Readers can register and follow it live at this address, or clicking on the image below

As usual, we will grab and highlight the most interesting charts from Gundlach’s presentation as they come in.

* * *

Gundlach, as usual, starts with one of his favorite charts, the one showing the global central bank balance sheet level juxtaposed to the global market, as the background for the Fed’s “180 degree turn” in the stock market’s recent rebound, which is understandable since the “S&P was and is in a bear market.”

If that wasn’t bad enough, Gundlach also said that stocks will take out the December low during the course of 2019 and markets will roll over earlier than they did last year.

Shifting from the market to the economy, Gundlach shows that global economic momentum is getting worse across the globe…

… as also confirmed by the next chart, showing the real-time dropoff in economic data.

Gundlach then highlights the sudden collapse in global trade, which would suggest the world is in a global recession.

And yet at the same time, US economic data, at least in the labor market, has never been stronger as Gundlach shows:

Which in turn means that inflation will keep rising, which, if Morgan Stanley is correct, will force the Fed to turn hawkish again, and hike once more in December and another three times in 2020.

Perhaps as a result of this favorable outlook on wages, consumer confidence remains strong..

… although one place where Gundlach sees a recessionary red flag, is the gadping difference between consumer expectations less the current situation; the catalyst for the DoubleLine founder: if the current situation start dropping that would be a big recessionary indicator.

Of course, another big red flag is the collapse in December retail sales, and despite the sharp rebound in the January print as we saw yesterday, Gundlach highlights the sharp drop in the 6 month average and highlights it as another potential recessionary risk factor.

Going back to one of his favorite topics, the relentless growth of US debt, Gundlach shows the following chart of debt by sector. Needless to say, it is troubling, and as Gundlach said, .

And tied to that, the following new warning on the US interest expense: “The US interest expense is projected by the CBO to explode higher starting yesterday”

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