Jeff Gundlach Says Bonds Prices Are Going To Fall
Jeffrey Gundlach is the Chief Executive Officer of DoubleLine. He is recognized as an expert in bonds and other debt-related investments. In 2011, he appeared on the cover of Barron’s as “The New Bond King”. In 2012, Bloomberg Markets magazine named him one of the “50 Most Influential”. In 2013, Mr. Gundlach was named “Money Manager of the Year” by Institutional Investor. In 2015, Bloomberg Markets magazine again named him one of the “50 Most Influential”.
DoubleLine Capital founder and CEO Jeffrey Gundlach was on CNBC today. One of the things bought up was that Jeffrey was one of the few who predicted Donald Trump would win the election back in 2016. At the time Jeffery compare Trumps “Make America Great Again“ campaign to Ronald Regan’s 1980, “Lets Make America Great Again” campaign. He also mentioned at the time that Trump has a gift for finding the soft spot in people and exploiting it pretty effectively.
Gundlach also told CNBC that the leading indicators he watches are low and that his forecast sees these indicators improving which makes it very unlikely that we’ll have a recession in the next six to 12 months. One of those indicators is the Gunlach Ratio, which I never heard before.
Gundlach tracks the ratio of copper prices to gold. Gundlach believes in the predictive value of the ratio since copper HG00, +0.07% is sensitive to swings in the economy, while gold GC00, +0.28% climbs when investors get frightened.
As the chart shows, copper is starting to climb relative to gold, which should imply that bond yields TMUBMUSD10Y, -1.89% will rise, meaning bonds will fall in value. He sees long-term rates marching higher as recession risks recede.
The iShares 20+ Year Treasury Bond ETF (TLT) is seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than twenty years. So if yields are going to rise, that means the TLT should fall. I will see it when I believe it as price must get through the monthly demand at $131.50 first.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
