Thursday, January 11, 2018

Hail To The (Bond) King

Jeff Gundlach is the founder of DoubleLine Capital in Los Angeles and is often called the Bond King.  He has just released his predictions for 2018.  In no particular order, they are:

1.  No recession on the one-year horizon.
2.  Unemployment will drop another 75 basis points, lower than 3.5% (hard to believe)
3.  The S&P will rise the first half of 2018 but end the year lower.
4.  Like stocks, the dollar will strengthen the first half of 2018 but then fall.
5.  Among other reasons, this makes commodities very attractive by mid-year.
6.  Stocks are more expensive in developed nations than emerging ones.
7.  "The high on bitcoin is in" -- stay away!
8.  Ten-year Treasury yields are about 2.54%, but won't hurt stocks until it hits 2.63%.
9.  Importantly, he predicts 10-year Treasuries will reach 6% by the next presidential election.