Billionaire money manager Jeffrey Gundlach predicted that the U.S. stock market has recovered because of the Federal Reserve's actions but a retest of the recent lows is possible.

"I think we take out the low," Gundlach told CNBC.

After their sharp bounce from recent lows, markets are looking quite tired and "the sentiment shifts should have investors concerned," Gundlach said.

“I’m certainly in the camp that we are not out of the woods. I think a retest of the low is very plausible,” Gundlach said.

He also warned that investors could be underestimating the social disruptions from the coronavirus.

“People don’t understand the magnitude of ... the social unease at least that’s going to happen when ... 26 million plus people have lost their job,” Gundlach said. “We’ve lost every single job that we created since the bottom in 2009.”

The DoubleLine Capital chief executive officer said he has put on a bearish bet against the S&P 500 at the 2,863 level. On Monday, the S&P 500 was up 1.22% at 2,871.3. The index is up 31% since touching a low of 2,191.86 on March 23.

“At this level, i think the upside and downside is very poor. I don’t think it could make it to 3,000, but it could. I think downside easily to the lows or beyond... I’m not nearly where I was in February when I was very, very short,” Gundlach said.

While markets were cheering improved testing for the coronavirus and the reopening of the economy is a positive, "many people don't understand the wide-ranging ramification of this societal shift that's going on," Gundlach said. "I am certainly in the camp that we are not out of the woods."

The crash in U.S. crude prices in recent weeks has given fresh urgency to bearish voices, who say it sounds alarm bells for global growth and are bracing for a catastrophic collapse in asset prices.

"The market's pretty much recovered obviously because of the Fed," Gundlach said.

In recent months, the Fed has slashed rates to near zero, restarted bond purchases and rolled out an unprecedented range of programs to keep credit flowing and shore up business and household confidence, as the central bank tried to offset the economic hit from the coronavirus outbreak.

The Fed's actions may have led to over-valued assets, Gundlach warned.

He singled out the iShares iBoxx Investment Grade Corporate Bond ETF, in particular, saying the ETF "looks to be the most over-valued asset in the bond market."

LQD is up about 23% since hitting a low on March 19, boosted by the Fed's move to buy corporate bonds through exchange-traded funds. On Monday the ETF was down 0.5%.

DoubleLine had about $148 billion in assets as of Dec. 31.

Meanwhile, Wall Street's fear gauge slipped on Monday for the fourth trading day to its lowest in more than seven weeks, with Colorado, Mississippi and Tennessee set to join other states in reopening businesses this week, despite disapproval from health experts.

Although trillions of dollars in stimulus have helped the S&P 500 recover nearly 30% from March lows, analysts say growing economic damage may cap further gains, unless there is progress on treatments for the disease.

Economists expect U.S. first-quarter GDP to have contracted 4% as shutdowns crushed production, supply chains and consumer spending, sparking millions of layoffs.

"Everyone's excited that we will reopen, and there's optimism around that but I would be a little concerned because what we really need is to return to normal for the markets to keep up with the optimism," said Julia Carlson, chief executive of Financial Freedom Wealth Management Group in Oregon.