The Bond King Speaks

The Bond King Speaks
December 18 05:28 2018

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 said Monday on CNBC said he was pretty sure we were already in a bear market and the S&P 500 will hit new lows.  He also said the Feds shouldn’t raise rates later this week.

“I think they shouldn’t raise them this week. The bond market is basically saying, ‘Fed you’ve got no way you should be raising interest rates.’ Look at the twos, threes, five-year part of the yield curve, which are flat at 2.7 percent,” Gundlach told CNBC’s Scott Wapner in Los Angeles. “The problem though isn’t that the Fed shouldn’t be raising rates. The problem is that the Fed shouldn’t have kept them so low for so long.”

“Usually the budget deficit expands in response to a recession. It’s a way of stimulating to get us out of recession,” Gundlach said. “But instead, we did it as a last gasp of keeping this economic recovery going.”


NOTE: around this time last year, Gundlach said the S&P 500 would decline after the 10-year yield hits 3%, Facebook’s would enter a bear market due to privacy issues and regulations and Bitcoin’s price would tank.  All three predictions came true.

I have to agree with Gunlach.  I just talked about the 2600 level on the S&P 500 this weekend.

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On the daily chart, the momentum is still down and although the 2600 level held on Friday, price action is itching to test the February lows.

That level was breached today and the S&P 500 closed today at 2551 and almost touched the February lows. 

My personal bias continues to be to the downside, but I’m sure we will see a bounce at some point…to get another opportunity to short the Markets. 

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.

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I'm a retail investor like most of you and learning everyday, but I have been educated and trained to identified the Smart Money on the charts to pick up whatever crumbs they leave behind.

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