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Gundlach's Stock Market Warning Comes True

FYI: Jeffrey Gundlach has been warning something’s got to give. Based on the past two days, looks like we have our answer.

Stocks fell around the world a second day and high-yield bonds headed for a fourth straight loss, resuming a historic correlation that the hedge fund manager on Wednesday had warned was alarmingly out of whack.
Regards,
Ted
https://www.fa-mag.com/news/gundlach-s-stock-market-warning-comes-true-35658.html?print

Comments

  • edited November 2017
    Well, sort of. The S&P is still above all its simple moving averages; may be testing the 20 today.

    It's very probable HY and stx will eventually converge, but the recent equity pattern hasn't broken yet, by any means. While credit and equity risk run in the same direction, the two asset classes don't march in lock step.

    They may be right in a few days or a few weeks, but FA is jumping the gun at this point.
  • It's better for them to make the call early. Then, if they're right they will be viewed as having made the right call. If they're wrong, nobody really cares.
  • Are hedge fund managers the very best leading indicators?
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