Jeffrey Gundlach, DoubleLine Money CEO and Wall Avenue “Bond King,” is pointing the finger at presidential hopeful Bernie Sanders for the market’s tumultuous rout this week.

“If this inventory marketplace reversal is thanks solely to the virus, then why is United Health care down far far more than [the S&P 500]? Why is healthcare as a sector broadly not outperforming? Reply to these inquiries: the market is digesting a superior than 50% possibility of Bernie having the nomination,” Gundlach wrote in an e mail to CNBC’s Scott Wapner on Wednesday.

While the big inventory averages rose marginally on Wednesday, it has been a dismal week for stocks as buyers fret about a dent to world financial expansion because of to the coronavirus. The S&P 500 wiped out a whopping $1.7 trillion in just two periods before this 7 days. The equity benchmark nosedived 6.3% in two times, struggling its largest two-working day drop given that August 2015.

All the whilst, Vermont Senator Sanders has opened up a double-digit lead nationally above his closest rivals in the Democratic presidential principal, according to an NBC Information/Wall Road Journal poll unveiled final 7 days. Sanders has the help of 27% of Democratic primary voters, a determine which is unchanged from January, the survey uncovered.

“Maybe this is the darkish aspect of momentum investing (which is precisely what defines ‘passive’),” Gundlach wrote. “The sector goes down in a knee jerk way on the Bernie rise, but the sector likely down would make Bernie’s polls go up on his rejection of a current market based mostly economic system. Which tends to make the industry go down an additional leg. Rinse and repeat.”

Gundlach has earlier mentioned that Sanders is the largest danger to the money marketplaces in 2020. Sanders, a self proclaimed “Democratic Socialist,” is pushing for policies such as higher taxes on the wealthy, breaking up large banking companies and a $15 for each hour minimum amount wage. Sanders has also vowed to get on the pharmaceutical business. 

Gundlach went on to say he pitied the Federal Reserve, which decreased curiosity premiums 3 situations past yr in buy to sustain the financial expansion. 

“Just months just after at last being in a position to expression the present plan stance ‘appropriate’ and ‘in a very good place’ the bond sector is asserting that current policy is, in simple fact (to quote Joe Biden), in require of considerable adjustment,” Gundlach wrote. 

If commodity rates, specifically oil costs, keep on their current weakness, Powell will have to pivot all over again quickly, in accordance to Gundlach. 

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