As we noted in an earlier post today, be careful what the Fed wishes for. And that by all the evidence seems to be "getting the rate hike" wrapped up before Xmas. And in the eyes of some they now have the excuse, the just out as yet-to-be revised job numbers.
Here a blurb from a story on MarketWatch today you might find of interest marketwatch.com/story/gundlach-says-the-sp-500-cant-handle-a-december-rate-increase-2015-11-06
In his latest salvo warning the Fed off a rate increase, DoubleLine Capital founder Jeffrey Gundlach told a packed audience at the 2015 Inside Fixed Income conference on Thursday night just what a disaster it could be.Gundlach said the Fed’s seeming obsession with getting the job done next month makes no sense, given financial conditions are largely worse than they were in February 2012, when the central bank started its third round of quantitative easing.
He said the biggest red flag against a hike is the S&P 500 itself. The index has recovered from losses in August and September, but looks “vulnerable to another pushback down because earnings are not there,” said Gundlach. “The S&P 500’s trailing 12-month P/E is 19; that’s not cheap.”
“Junk bonds are signaling with clarion bells: Do not raise interest rates,” Gundlach said, advising investors to sell junk bonds “on strength.” And if oil can’t get its head above $50 a barrel, the investment-grade bond market will start getting hit by downgrades, he said, according to Reuters.
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