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Homebuilders and imports — What you need to know in markets on Wednesday

Myles Udland
Markets Reporter

Each of the major stock market indexes are at record highs.

With its sixth-straight day of record highs to start the year, the S&P 500 tied a record from 1964 and can set a new kickoff record streak with a positive close on Wednesday. That’s according to Ryan Detrick, senior market strategist at LPL Financial.

On the calendar on Wednesday, investors will have a fairly light schedule with the economic highlight coming from the December reading on import prices. Earnings, meanwhile, will be focused on homebuilders with Lennar (LEN) and KB Home (KBH) both reporting earnings while grocery chain Supervalu (SVU) will also release quarterly results.

KB Home earnings will be a highlight of the investing schedule on Wednesday.  (AP Photo/LM Otero, File)

Gundlach’s market outlook

Love him or hate him, Jeffrey Gundlach, the CEO of DoubleLine funds, has become one of if not the most influential financial market commentator.

And his webcast previewing 2018 on Tuesday was a must-listen for anyone who wants nearly 90 straight minutes of Gundlach opining on the state of markets and the economy.

The overarching theme for Gundlach is that all systems are a go when it comes to the economy and any signals that a recession could be looming. And if 2017’s market was one big upside surprise for investors, then 2018 seems likely to be a year in which downside surprises return for investors.

Jeffrey Gundlach, CEO of DoubleLine Capital, speaks during the Sohn Investment Conference in New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid

In this vein, Gundlach had a big call for the stock market — 2018 will see a negative return for the S&P 500. Even if the market rallies 15% from here, Gundlach expects that when the dust settles it will be a negative year for markets.

On bitcoin, Gundlach said he thinks the high is in for the digital currency. “Bitcoin to me is kind of an unknown,” Gundlach said. “I see people go on TV and say they are bitcoin experts, and I don’t know what that means.”

And perhaps his most consequential discussion was on the bond market, where Gundlach singled out a few key levels for investors to watch — 2.63% on the 10-year Treasury yield and 3% on the 30-year.

Gundlach says that if these levels are breached, they will be breached together and that yields are going go to a lot higher from there. This move would also mark the end of what he called the “ancient” bond bull market that has been with many investors for the duration of their investment careers.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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