'New Bond King' Geondeullak: "US Stock Market Likely to Fall Further in April... V-Shaped Recovery Difficult"
[Asia Economy Reporter Jeong Hyunjin] Jeffrey Gundlach, CEO of DoubleLine Capital, known as the 'new bond king' on Wall Street, forecasted that the U.S. stock market, which has been experiencing a rollercoaster ride due to the novel coronavirus infection (COVID-19), could see further declines within this month.
According to Bloomberg News on March 31 (local time), Gundlach said during a webcast, "I think we will feel a panic-like state again in April," adding that the market could fall below the lows recorded last month. In particular, he noted that economic uncertainty caused by the aftermath of COVID-19 is troubling investors, and the S&P 500 index's low this month is expected to fall below the March low recorded last week.
Gundlach said that time and sacrifice are needed for the U.S. economy to become strong again, stating, "We will return to a better position, but we will not have a 'V'-shaped recovery back to the January 2020 situation before the full impact of COVID-19." He also predicted that, just as the stock markets in Japan, Europe, and emerging countries have not recovered their previous highs for over a decade, the U.S. stock market will also find it difficult to regain its peak for a long time.
Gundlach also mentioned that the assumption that the U.S. economy will recover quickly is overly optimistic, saying the current situation resembles a 'depression,' and the unemployment rate is expected to rise to 10%.
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Meanwhile, in the early stages of the COVID-19 shock, many expected the global economy to show a sharp 'V'-shaped recovery, but as COVID-19 rapidly spread worldwide, more and more economic experts are moving away from such expectations. Regarding this, Joseph Stiglitz, a professor at Columbia University in the U.S., said, "We cannot be sure if the virus will disappear by the end of the second quarter, and if it continues until summer, the impact will be amplified."
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