Investment managers are warning that markets probably have further to fall as China's growth slows, oil prices plunge and central bankers lack tools to prop up economies.
The Standard & Poor's 500 Index will drop another 10% to 1,650 and oil could fall as low as US$20 a barrel as investors flee for safety, according to Scott Minerd, chief investment officer of Guggenheim Partners. Jeffrey Rottinghaus, whose T. Rowe Price mutual fund beat 99% of rivals over the past year, said stock prices could fall another 10% as the U.S. economy slips into a mild recession.
"I expect a protracted decline in the S&P 500," Jeffrey Gundlach, co-founder of DoubleLine Capital, said in an e-mailed response to questions. "Investors should sell the bounce-back rally which could come at any time."
The S&P 500 fell as much as 3.7% Wednesday, the most since August, before partially recovering to close at 1,859.33, down 1.2 %. All 30 members of the Dow Jones Industrial Average were below prices at the beginning of the year, with the index down 1.6% for the day and 9.5% since Dec 31. Oil fell 6.7 per cent to US$26.55, down 28% year-to- date.
"Excessive risk exposure is adding to the selling pressure," Mr Gundlach said. "Today's plunge into the lows looked like a margin call liquidation type of event." Mr Rottinghaus, manager of the US$203 million T. Rowe Price US Large-Cap Core Fund, said "industrials and commodities have been in a recession for at least six months" in the US.
"What we are trying to figure out is how much that bleeds into the consumer side of the economy," he said in an interview.
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The Standard & Poor's 500 Index will drop another 10% to 1,650 and oil could fall as low as US$20 a barrel as investors flee for safety, according to Scott Minerd, chief investment officer of Guggenheim Partners. Jeffrey Rottinghaus, whose T. Rowe Price mutual fund beat 99% of rivals over the past year, said stock prices could fall another 10% as the U.S. economy slips into a mild recession.
"I expect a protracted decline in the S&P 500," Jeffrey Gundlach, co-founder of DoubleLine Capital, said in an e-mailed response to questions. "Investors should sell the bounce-back rally which could come at any time."
The S&P 500 fell as much as 3.7% Wednesday, the most since August, before partially recovering to close at 1,859.33, down 1.2 %. All 30 members of the Dow Jones Industrial Average were below prices at the beginning of the year, with the index down 1.6% for the day and 9.5% since Dec 31. Oil fell 6.7 per cent to US$26.55, down 28% year-to- date.
"Excessive risk exposure is adding to the selling pressure," Mr Gundlach said. "Today's plunge into the lows looked like a margin call liquidation type of event." Mr Rottinghaus, manager of the US$203 million T. Rowe Price US Large-Cap Core Fund, said "industrials and commodities have been in a recession for at least six months" in the US.
"What we are trying to figure out is how much that bleeds into the consumer side of the economy," he said in an interview.
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