Jeffrey Gundlach: more trouble on the way

Jeffrey Gundlach, founder of asset manager DoubleLine Capital, is not optimistic about the outlook for stockmarkets.

Jeffrey Gundlach, founder of asset manager DoubleLine Capital, is not optimistic about the outlook for stockmarkets. The UK's referendum on European Union membership and Janet Yellen's decision not to raise rates has created "economic and political uncertainty", he tells Barron's. A Brexit-induced recession would hit the US, since "the companies in the Standard & Poor's 500 get more than 40% of their revenue from outside the US, and a big piece of that is Europe".

In the medium term there could be even more political instability, due to the fact that "robots are taking an awful lot of jobs". For example, there are many people who earn their living from driving, he says. "You get a driverless car, and all of a sudden they're unemployed." And automation certainly isn't the only threat to stability, since high debt and demographics are also "putting a big headwind onto economic growth".

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