Everyone knows a compass isn’t useful for determining stock market direction. But bitcoin seems to be, according to Jeffrey Gundlach, founder of DoubleLine Capital.
“Strangely, bitcoin seems to be the poster child for social mood and market mood,” he tells CNBC’s “Halftime Report” on Friday. Gundlach, a well-known bond manager, is often referred to as Wall Street’s ‘Bond King.’
Bitcoin had a sizable run-up to nearly $20,000 before in crashed in mid-December. That plunge was a forerunner to stock market volatility in January. Bitcoin has since stabilized, along with stocks. The cryptocurrency has traded in the $8,000 and $11,000 range for the past several weeks, according to Coindesk. On Friday, the cryptocurrency opened at $9,830.43 and reached a high of $10,397.68 in early afternoon trading. The S&P 500, Dow Jones Industrial Average and the Nasdaq were trading in positive territory as of mid-day on Friday.
“If stocks are going to take another tumble, I think it would be preceded by a bitcoin decline,” Gundlach tells CNBC.
Also on Friday, Gundlach cast doubt that wages can rise without inflation rearing up. It would be a “miracle,” he tweeted. That’s contrary to the White House’s stance on the subject, which Treasury Secretary discussed Thursday in an interview with Bloomberg.
—Cheryl Winokur Munk