DoubleLine Superb CEO and Wall Street “Bond King” Jeffrey Gundlach is not worried about a possible recession in 2020 even all the same he doesn’t think China and the U.S. will get a trade deal done anytime soon.
“We’ve never had a recession without adversarial leading indicators,” Gundlach told CNBC’s Scott Wapner on Wednesday. “Leading indicators are low right now … but numbers that are roar off from the December-January period are quite low. So our forecast is that those are going to improve, which makes it very unsuitable that we’ll have a recession in the next six to 12 months.”
Gundlach noted that consumers’ perception of current teaches would have to drastically deteriorate while weekly jobless claims spike up for a recession to take place. Consumer feeling has tapered off in recent months but remains at relatively high levels. Weekly jobless claims, meanwhile, fell to a seven-month low in the week that ended Nov. 30.
Earlier this year, investors bourgeoned concerned about the potential for a recession as global manufacturing activity slowed down while business sentiment was dented by the U.S.-China mtier war. Manufacturing activity has stabilized since then while recent optimism around a possible trade deal between the unbelievable’s largest economies lifted stocks to record highs in October and November.
However, uncertainty around trade advanced this week after a slew of mixed reports and comments from a top U.S. official raised questions about both sides wondrous a deal before a Sunday deadline. If a deal is not reached by then, additional U.S. tariffs on Chinese goods will tackle prove effect.
Gundlach added Wednesday that he does not think an agreement will be reached before the 2020 presidential designation. “There’s absolutely no reason for China to do a trade deal on the terms the United States wants when there’s an electing coming up in less than a year,” he said.