Gundlach: the price of oil today will lead to a “true collapse” in Capex, hiring and bankruptcy of some leveraged energy companies.

Thursday, January 15, 2015
By Paul Martin

Investmentwatchblog.com
January 15th, 2015

Jeffrey Gundlach said on Tuesday there is a possibility

of a “true collapse” in U.S. capital expenditures and hiring if the price of oil stays at its current level. Gundlach, who correctly predicted government bond yields would plunge in 2014, said on his annual outlook webcast that 35 percent of Standard & Poor’s capital expenditures comes from the energy sector and if oil remains around the $45-plus level or drops further, growth in capital expenditures could likely “fall to zero.” Gundlach added that U.S. stocks could outperform other countries’ equities as the economic recovery looks stronger than its counterparts, though double-digit gains cannot be repeated.

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