DoubleLine Capital's Jeffrey Gundlach spoke with Barron's about the state of the markets amid economic uncertainty in Europe and in the United States. The interview centered on the U.K.'s exit from the EU in addition to the upcoming presidential elections in the United States.

Jeffrey Gundlach Doubleline Capital LP CEO

In the Q&A, the DoubleLine [profile] PM suggests he was surprised by Brexit but that the uncertainty doesn't worry him. That's because of DoubleLine's commitment to high-quality bond portfolios. Where the investment management firm does have exposure to stocks, which is in its diversified funds, Gundlach suggests the firm is at "low-risk weightings" and even "net short certain parts of the stock market."

That's not to suggest it will be smooth sailing. Gundlach states DoubleLine had already been preparing for a "summer of volatility," pointing to the Fed's mixed messages about raising interest rates, which has since given way to "economic and political uncertainty."

It matters to U.S. economic growth if Britain falls into something of a recession. The companies in the Standard & Poor's get more than 40 [percent] of their revenue from outside the U.S., and a big piece of that is Europe, so there is a risk there. Then there is the risk that it is really just the beginning of something -- that there will be more downside for stocks -- and not the end of something. That is a very real risk. - Gundlach in Barron's

Gundlach goes on to compare the U.K.'s vote to leave the EU to the upcoming presidential elections in the United States.  

Edited by: Gerelyn Terzo


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