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John Gerard Lewis
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John Gerard Lewis is the principal at Gerard Wealth Management and also owns law-related media companies. He manages the "Stable High Yield" model at Covestor.com (http://bit.ly/wlY0i4) and has appeared on the Fox Business Network (http://video.foxbusiness.com/v/1620019538001).
My company:
Gerard Wealth Management, Inc.
  • Gundlach: Stocks Vulnerable, Treasurys 'Tremendously Undervalued' 0 comments
    Jan 15, 2014 9:11 AM

    The stock market is showing signs of a market top, said Jeffrey Gundlach, chief executive officer of DoubleLine Capital, in a webcast Tuesday.

    "If the S&P falls below 1750, investors will get nervous," he said.

    During its more than 32 percent run-up in 2013, the S&P 500 never broke its 200-day moving average, Gundlach said, and never came close to doing so. He also pointed to high current investor sentiment, a contrary market indicator.

    Although he thinks there's a chance that stocks could be higher by year's end, he expects any such gains to be nowhere near those of 2013.

    Gundlach said that in his more than 30 years as an investment professional, he's never seen such unanimity among investment forecasters. One area where he departs from them is in the forecast for the 10-year Treasury yield, which is largely thought to be heading higher.

    "I'm not so sure that the 10-year yield is going far higher," he said. In the near term, in fact, he thinks it could drop towards 2.5 percent.

    "People are anti-Treasurys," he said, but "they are tremendously undervalued."

    But that's not true for all bonds, Gundlach said. Investment-grade corporates have been very popular, so much so that they've reached their "richest level ever." High-yield (junk) bonds, which have performed well over the past year, are even more overvalued, he said.

    Gundlach was not optimistic about housing, saying "it's softer than people think." Recent improvements have only returned housing "to a level that we used to consider weak," he said, and he expects home ownership in the U.S. to fall further.

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