Saturday, 15 June 2019

Markets fall as Gundlach sees bigger chance of US recession

Markets mostly fell on Friday.

The S&P 500 fell 0.2 percent and the STOXX Europe 600 fell 0.4 percent. However, the Nikkei 225 rose 0.4 percent.

Economic data on Friday were mixed, with US retail sales rising 0.5 percent in May and industrial production rising 0.4 percent, but the University of Michigan’s consumer sentiment index falling to 97.9 in June from 100 in May. Also, China's industrial output growth slowed to a more than 17-year low.

Market sentiment was also dented by a Broadcom announcement on Thursday that it had lowered its outlook for the rest of the year, which Tom Martin, senior portfolio manager at Globalt Investments, said “adds to fears about global demand”.

Indeed, DoubleLine Capital Chief Executive Officer Jeffrey Gundlach now sees a bigger chance of a recession hitting the US in the not-too-distant future.

“Several indicators suggest a recession could take place in one year,” Gundlach said on an investor website.

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