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Jeffrey Gundlach, DoubleLine Capital CEO and Wall Street “Bond King,” is pointing the finger at presidential hopeful Bernie Sanders for the market’s tumultuous rout this week.
“If this stock market reversal is due exclusively to the virus, then why is United Healthcare down far more than SPX? Why is healthcare as a sector broadly not outperforming? Answer to these questions: the market is digesting a better than 50% chance of Bernie getting the nomination,” Gundlach wrote in an email to CNBC’s Scott Wapner on Wednesday.
“Maybe this is the dark side of momentum investing (which is exactly what defines “passive”),” Gundlack wrote. “The market goes down in a knee jerk way on the Bernie rise, but the market going down makes Bernie’s polls go up on his rejection of a market based economy. Which makes the market go down another leg. Rinse and repeat.”
While the major stock averages rose slightly on Wednesday, it has been a tumultuous week for stocks an investors worry about a dent to global economic growth due to the coronavirus. The S&P 500 wiped out a whopping $1.7 trillion in just two sessions earlier this week. The equity benchmark nosedived 6.3% since Monday, suffering its biggest two-day drop since August 2015.
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