Economic Information Agency, Special Report, 2nd: Jeffrey Gundlach, CEO of DoubleLine, known as the "New Bond King," warned on Thursday (1st) that the current U.S. stock market resembles a hollow tree—appearing fine on the outside but already rotting and hollow inside, ready to break at any moment. He also expressed deep concern over hidden risks in the private market, the uncontrolled expansion of the U.S. fiscal deficit, and structural changes to the dollar's status.
*S&P 500 sees numerous stocks in correction*
Gundlach stated that despite the S&P 500 index hovering near historic highs, there is severe divergence within the market, with numerous individual stocks quietly entering correction territory and market breadth continuing to deteriorate.
Data shows that 80% of the S&P 500 component stocks have fallen at least 10% from their 52-week highs, entering technical correction. Among them, 39% have declined more than 20%.
Gundlach said that a silver maple tree outside his home in New York State appeared normal on the outside, but one day a large branch suddenly snapped, revealing a completely decayed and hollow interior, showing that the tree was already on the verge of collapse.
He said, "I suddenly realized this is exactly what's happening to the U.S. stock market right now. The S&P 500 is rotting from the inside, but it's not obvious—until a branch falls, you won't realize the market is already hollow, just like that tree."
*Traditional safe-haven status of the dollar is unraveling*
Recently, yields on U.S. Treasury bonds of all maturities have surged, putting pressure on the bond market. Gundlach is deeply concerned about the rapid increase in the U.S. fiscal deficit, believing that whether the government prints money or restructures debt, inflation will ultimately be driven higher.
Gundlach also pointed out that the dollar's traditional safe-haven attribute is unraveling. During last April's S&P 500 correction, the dollar experienced a rare decline, a historical first divergence. "People realize we have entered a different system, so during the next recession, the dollar won't rise—it will fall," implying that the market is re-evaluating the long-term credit foundation of dollar-denominated assets. (yc)
*S&P 500 sees numerous stocks in correction*
Gundlach stated that despite the S&P 500 index hovering near historic highs, there is severe divergence within the market, with numerous individual stocks quietly entering correction territory and market breadth continuing to deteriorate.
Data shows that 80% of the S&P 500 component stocks have fallen at least 10% from their 52-week highs, entering technical correction. Among them, 39% have declined more than 20%.
Gundlach said that a silver maple tree outside his home in New York State appeared normal on the outside, but one day a large branch suddenly snapped, revealing a completely decayed and hollow interior, showing that the tree was already on the verge of collapse.
He said, "I suddenly realized this is exactly what's happening to the U.S. stock market right now. The S&P 500 is rotting from the inside, but it's not obvious—until a branch falls, you won't realize the market is already hollow, just like that tree."
*Traditional safe-haven status of the dollar is unraveling*
Recently, yields on U.S. Treasury bonds of all maturities have surged, putting pressure on the bond market. Gundlach is deeply concerned about the rapid increase in the U.S. fiscal deficit, believing that whether the government prints money or restructures debt, inflation will ultimately be driven higher.
Gundlach also pointed out that the dollar's traditional safe-haven attribute is unraveling. During last April's S&P 500 correction, the dollar experienced a rare decline, a historical first divergence. "People realize we have entered a different system, so during the next recession, the dollar won't rise—it will fall," implying that the market is re-evaluating the long-term credit foundation of dollar-denominated assets. (yc)
