‘I’m certainly in the camp that we are not out of the woods. … I think a retest of the low is very plausible.’

Published: May 2, 2020 at 9:54 a.m. ET, By Shawn Langlois

That’s the gloomy outlook Jeffrey Gundlach, CEO of DoubleLine, delivered to CNBC on Monday as the stock market staged a strong rally in the face of what he believes is too much optimism.

“People don’t understand the magnitude of … the social unease … that’s going to happen,” Gundlach explained. “We’ve lost every single job that we created since the bottom in 2009.”

With that in mind, he revealed that he just shorted the S&P at 2,863.

“At this level, I think the upside and downside is very poor,” he said. “I don’t think it could make it to 3,000, but it could. I think downside easily to the lows or beyond.” The S&P hit a low of 2,192 on March 23 before rebounding about 30% as the Fed rolled out its historic stimulus measures.

Earlier this month, Gundlach warned of more selling in a webcast, with a “more enduring low” on the way for the “dysfunctional” stock market.

At last check, the S&P 500 index SPX ended nearly 42 points, or 1.5%, higher on Monday, while the Dow Jones Industrial Average DJIA and the tech-heavy Nasdaq Composite COMP also finished the session firmly in green territory.

Watch the interview:

Source: www.marketwatch.com