Billionaire investor Howard Marks has a lot of clout on Wall Street, and he thinks the recent stock market rally isn’t reflecting what’s actually going on in the coronavirus-afflicted world.

“We’re only down 15% from the all-time high of Feb. 19. It seems to me the world is more than 15% screwed up.”

The co-founder of Oaktree Capital Management sees a huge disconnect between Wall Street and Main Street, and what’s happening in the economy overall will drag the stock market down again soon, he said.

“We’re only down 15% from the all-time high of Feb. 19,” Marks said during an interview on CNBC’s “Halftime Report” on Monday. “It seems to me the world is more than 15% screwed up.”

It’s been a wild ride down and back up for the S&P 500 over the last two months. Fueled by positive developments on the waning spread of COVID-19 and a flood of liquidity from the Federal Reserve. The index has gained 30% since its intraday low on March 23.

But Marks argues that a rally like this happens all the time in bear markets, and historical data shows markets plummeting again to test new lows.

“It took seven years to get back to the 2000 highs in 2007,” Marks said. “It took 5 ½ years to get back to the 2007 highs in late 2012. So, is it really appropriate that, given all the bad news in the world today, we should get back to the highs in only three months? That seems inappropriately positive.”

Carr Says Unemployment Will Hurt Stock Market Rally

Banyan Hill Editor and Chartered Market Technician Michael Carr issued a similar warning Monday. In his recurring Chart of the Day here on Money & Markets, Carr warned the one-two punch of high unemployment and weak consumer activity will drag any sort of recovery out for much longer than some optimists are projecting, and it will hurt the stock market rally.

In a few months, we will see analysts are too optimistic. The economy won’t recover suddenly. Stock prices will fall to reflect the reality of an extended recession, and the stock market rally will fizzle.

More than 20 million have filed for unemployment in the last four weeks, and a poll from Metlife and the U.S. Chamber of Commerce found 24% of small businesses are at most two months away from permanently closing. Retail sales also dropped 8.7% in March, which was the largest one-month drop ever.

“People are traumatized, and not just because of the performance of their stocks,” Marks said. “Everybody’s life is hugely changed.”

The recent stock market rally could hold up, but it seems more likely that a dragged out economic recovery will bring Wall Street down again to a double bottom over the next few months.