Wednesday, December 14, 2016
GUNDLACH: Watch out for a stock market sell-off around inauguration day
DoubleLine Funds founder Jeff Gundlach said the stock market could sell-off around inauguration day.
During his final investor webcast for the year on Tuesday, he pointed out that stocks typically rise in the days after an election, just as they have.
But they drop after the president is sworn in, as investors realize that he does not have a magic wand to implement everything they are hopeful for.
Gundlach's presentation was titled "Drain The Swamp," a reference to President-elect Donald Trump's promise to reform ethics in Washington by not relying on career lobbyists and party insiders. However, Trump's top cabinet picks have included former Goldman Sachs staffers, CEOs, and politicians.
Gundlach was one of the only strategists to correctly forecast that Trump would win. In a webcast last month, he said Americans' discontent with wage growth, income inequality and Obamacare were among the reasons why Trump unexpectedly won.