The Standard & Poor’s 500 Index has about 2 percent upside and 20 percent downside, making for a lousy risk-reward trade-off, according to money manager Jeffrey Gundlach.

Betting on stocks is a “big losing proposition,” Gundlach said Tuesday during a webcast. The recent rebound is a “bear market rally,” he said.

The S&P 500 Index, a benchmark for U.S. stocks, fell the most in two weeks Tuesday, led by a selloff in energy shares, after worsening economic data from Asia reignited concern over the outlook for global growth. Reports showed Japan’s economy and Chinese exports are shrinking, reviving anxiety that monetary policy won’t be enough to support the global economy.

The declines also come after the S&P 500’s best three-week stretch since 2014, as investors reined in risk-taking before gatherings of central bankers in Europe and the U.S.

Gundlach, 56, runs the $56 billion DoubleLine Total Return Bond Fund with Philip Barach. Los Angeles-based DoubleLine Capital’s flagship mutual fund has beaten 99 percent of its Bloomberg peers over the past five years and 58 percent in 2016.

Recession Unlikely

In other pronouncements, Gundlach said:

• Even with the high likelihood of domestic stock markets facing losses, the chances of a U.S. recession in the near term are low.
• Oil inventories are still “through the roof” and demand is too weak to fuel a recovery in energy markets. Bankruptcies are likely to increase in the sector, with more corporate debt facing downgrades, a trend that is also hurting banks. When the defaults come, “recovery rates are going to be highly disappointing” because borrowers are so heavily levered, he said.
• Gold, which is up almost 19 percent this year to about $1,262 an ounce, will continue to climb toward $1,400. “Stay long,” Gundlach said.
• Negative interest rates in Europe and Japan have had the opposite of the anticipated effect on currencies, with both the euro and Yen gaining against the dollar since central bankers moved rates to below zero. They’ve also strengthened non-dollar- denominated bonds. “You’re better off in G7 bonds than U.S. dollar bonds,” he said.
• The Federal Reserve will probably avoid a new round of quantitative easing and negative interest rates. In the U.S., he said, negative rates would “backfire like an old Model T.”