DoubleLine
Capital
CEO
Jeffrey
Gundlach
said Tuesday
that
he
sees
the
chance
of
a
severe
recession
coming
in
2024
and
that
the
S
&
P
500
,
possibly
in
anticipation,
may
be
forming
a
particularly
bearish
technical
trading
pattern.
Gundlach,
a
noted
fixed
income
investor
whose
firm
managed
$96
billion
as
of
last
June,
has
been
calling
a
recession
since
early
last
year.
He
now
sees
an
even
higher
likelihood
as
a
result
of
stronger
recessionary
signals
springing
from
the
bond
market.
He
highlighted
the
inversion
of
the
2-year
and
10-year
Treasury
note
yields,
where
2-years
yield
more
than
10-years,
and
the
fact
that
it
has
been
in
the
process
of
reversing.
The
yield-curve
inversion
has
been
a
reliable
recession
predictor
and
signs
of
a
reversal
could
be
indicative
of
an
imminent
economic
downturn.
“The
curve
de-inverting
is
highly
suggestive
of
a
recession.
And
I
think
the
dollar
is
going
to
have
big
problems
in
the
next
recession,
as
a
consequence
of
the
policies
that
we
run
to
try
to
deal
with
what
could
be
a
very
painful
recession,”
Gundlach
said
in
a
DoubleLine
investor
webcast.
He
added
that
the
curve
between
2-
and
10-year
Treasury
yields
had
been
inverted
for
79
weeks,
close
to
a
record
of
89
weeks
set
during
the
Carter
administration
in
1979.
Other
than
the
yield
curve,
Gundlach
said
leading
economic
indicators
have
been
flashing
contractionary
signals
for
a
long
time,
especially
manufacturing.
‘Double
top?’
Gundlach
pointed
out
that
the
S
&
P
500
has
almost
returned
to
its
record
level
set
in
January
2022,
forming
a
“double
top”
price
chart.
“We
are
almost
exactly
two
years
later
on,
basically
at
the
same
place.
I
think
that
this
looks
like
a
pretty
lousy
trade
location
to
own
stocks,”
Gundlach
said.
A
double
top
is
a
bearish
technical
reversal
pattern
that
forms
after
an
asset
reaches
a
high
price
two
consecutive
times
with
a
moderate
decline
between
the
two
highs.
At
the
end
of
2023,
after
a
24%
rally,
the
S
&
P
500
was
less
than
1%
from
its
all-time
high
of
4796.56
reached
in
January
2022.
Gundlach
said
he
has
been
favoring
non-U.S.
equities
over
domestic
stocks
for
a
few
years,
and
a
weaker
dollar
will
make
this
trade
more
attractive
in
the
future.
“We’re
not
really
the
world
beater
any
longer
and
that
might
have
something
to
do
with
all
of
our
mismanagement,
or
our
fiscal
situation
and
the
crazy
policies
that
we’ve
been
putting
in
place
in
more
recent
years,”
he
said.
Gundlach
said
the
greenback
is
losing
its
momentum
and
the
S
&
P
500
should
underperform
its
international
counterparts
in
the
next
recession.
