Markets mixed but US stock market “is going to break down”

Markets were mixed on Tuesday.

The S&P 500 was flat and the Nikkei 225 fell 0.3 percent but the STOXX Europe 600 surged 1.5 percent and the Shanghai Composite rose 0.4 percent.

Jeffrey Gundlach, founder and chief executive officer of DoubleLine, thinks that the US stock market “is going to break down” as the economy is showing signs of weakness ahead.

Gundlach said that corporate bonds “remain very overvalued” and “should be avoided”.

Gundlach suggested that investors would do much better with stocks outside of the US.

Meanwhile, though, Nomura analysts recommended caution on China, suggesting that investors “may be unprepared for a significantly worse slowdown in Q2”.