& # 39; I'm pretty sure this is a bear market & # 39;
DoubleLine Capital CEO Jeffrey Gundlach said on Monday that he "absolutely" believes that the S & P 500 will fall below the index as early as 2018.
"I'm pretty sure this is a bear market," Gundlach told Scott Wapner on CNBC's mid-term report. "
" We've had almost all the variables that characterize a bear market, "added Gundlach.
S & P 500 is not in a bear market, but 11 percent from record high reached in September. Wall Street traditionally defines a bear market as a decline of 20 percent or more. The S & P 500 fell as low as 2532.69 in February, slightly more than 2 percent lower from where it is now.
Shares fall into a bear market usually after "something happens that makes no sense at any time," says Gundlach. Cryptocurrency is "mani" this time he said. Gundlach said that bitcoin is an indicator that the market is in front of it, much like under dotco m bubble when technology companies were "IPOs that had no sales" or in 2006 when subprime lending "went beyond what it should have."
Bitcoin began to fall early in 201[ads1]8. "One by one, you begin to see different sectors of the market give up" after the crypto curves sold strongly, Gundlach said. After each of the big stock indices "rolled over," said the Gundlach bull market was "down to the FAANGs." But even those bellwethers of growth do not last. The five FAANG shares – Facebook, Amazon, Apple, Netflix and Google parent alphabet – are currently in or near bear markets.
"It was some of the last straw" in the beef market, Gundlach said.
Gundlach assumed in March that the closely monitored 10-year government bond yields would hit three percent and send shares as tumbler. His call was fulfilled a few months ago, as October was one of the worst months for American shares since the financial crisis.
Gundlach revealed in February that he was opposed to Facebook shares. He said that his short was due to falling public perceptions of the company. Facebook's stock is down by more than 13 percent since Gundlach's conversation.
He also predicted bitcoin cratering in 2017 and said that "if you're a bit bitcoin today, you'll make money." At that time, the bitcoin traded at around $ 16,000. Cryptocurrency is now trading around $ 3,400, losing about 75 percent of the value this year.
DoubleLine has over $ 120 billion in assets under management, according to the company's website.
