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"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 <.SPX> "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."
Last week, New York Federal Reserve President William Dudley
said the U.S. economy could be strong enough to warrant an
interest rate increase in June or July, reinforcing the drum
beat from within the Fed in recent days that rate increases are
coming soon. A range of policymakers with normally varying views
on monetary policy are now stating a rate increase is possible
at the next policy meeting in June.
Gundlach has been known for his prescient investment calls. Last
year, Gundlach correctly predicted that oil prices would plunge,
junk bonds would live up to their name and China's slowing
economy would pressure emerging markets. In 2014, Gundlach
correctly also forecast U.S. Treasury yields would fall, not
rise as many others had expected.
(Reporting by Jennifer Ablan; Editing by Chris Reese)
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