Bill Gross, a bond manager, forecasts further fall of 10 percent in many asset classes, while advising investors that cash is the best bet until a clear picture about the next direction of the market emerges.

The US stock markets could witness another 10 percent drop as the possible rally on the lines of 2013 is unlikely considering the current economic conditions.

Last week's US jobs data resulted in whipsaw market reaction following stock markets, bonds and emerging market debt have become like casino, said Gross. 

Bill Gross is co-founder of Pacific Investment Management (Pimco) and Bill Gross manages $1.4-billion Janus Global Unconstrained Bond Fund.

Recently giving predictions on German bonds and Chinese equities,Gross' latest forecast on the US stocks signals further drop of 10 percent as corporate profits have turned flat and sluggish commodity prices. 

The encouraging growth in corporate profits propelled the rally in 2013 and now those conditions are not visible in the US economy.  

Gross further explained that cash is the best bet in the present uncertainty in the markets just as New York City is the safe harbor for Hurricane Joaquin. Cash doesn't yield anything and doesn't lose as well, he said. He advised investors that earning 25-50basis points on Commercial Papers are better than expecting of four percent return on risk assets. 

The oil price drop and slump in commodities markets are impacting the US economy and many Wall Street companies.

Gross said: "More negative numbers lie ahead and if you define a bear market by a 20 percent correction, at some point that's six to 12 months, and we'll have a classic definition of a bear market, which means another 10 percent downside."

Low interest rates would help bringing stabilization in asset prices. After the financial crisis in 2008-09, the US Fed brought interest rate lower to near zero level. Lower interest rates help the housing sector recover from its recession in 2008.

National Home Price Index is at 175.11 at present as against its level of 150 point in 2009. The index was moving down until February 2012 and from then onwards, it started recovering to the current level o f175.11 points, explains Gross.

The volatility measuring benchmark the Volatility S&P 500 index is moving upwards as it peaked on 24 August when Chinese stock markets tumbled.

The volatility index rose over 45 percent when Shanghai index dropped 8.50 percent and S&P 500 index fell four percent on Black Monday.

At this juncture, the stock and bond markets are reeling under uncertainty. If US Fed hikes interest rate, then it'll result in the further drop in the stock and bond markets. Funds will turn to safe haven and this will further put pressure on equities. 

Markets are anticipating that US Federal Reserve will take the decision to hike interest rate in the next meeting. The drop in chances that Fed doesn't hike interest rate is also supporting the view. The odds of a Fed liftoff this month fell to 10 percent, said future traders.

During September, hiring pace is also slowed down, while wage growth is stalled. Low wages and sluggish jobs market are impacting retail sales and the US economy.