It is our practice to report on Jeffrey Gundlach’s webcasts. Unfortunately, due to a technical error, we were unable to record yesterday’s webcast. Our article below is based on reporting from other web sites: Zero Hedge, CNBC, Yahoo and FA Mag.
Q2 hedge fund letters, conference, scoops etc
The yield on the benchmark 10-year Treasury security was 1.42% on September 3, and it won’t go any lower this year, according to Jeffrey Gundlach. He said he would “absolutely not” buy 10-year bonds, with yields now at 1.75%, and recommended that investors stay in short-duration, high-quality assets. In the last several weeks, several trillion dollars of sovereign debt has gone from negative to positive nominal yields.
Gundlach spoke to investors via a webcast, which he titled “The Greatest Economy Ever!” and the focus was on his flagship total-return fund (DBLTX). Slides from that webcast are available on the Zero Hedge web site cited above. Gundlach is the founder and chairman of Los Angeles-based DoubleLine Capital.
“It’s not a great idea to bet on low interest rates,” Gundlach said.
He said there is a high probability of a rate cut by the Fed today (which, in fact, did happen) and that the market predicts two more rate cuts in 2019 and another in 2020.
Earlier this week, there was an unexpected spike in “repo” (short-term repurchase) rates, which rose to approximately 10%. This led the Fed to provide extra liquidity to the market, in what some have called “QE light.” Gundlach said this was a warning sign that the Fed would embark on more aggressive quantitative easing (QE).
Read the full article here by Robert Huebscher, Advisor Perspectives
