One month after his webcast titled optimistically "Drain the Swamp", which was a forward look at the impact of the upcoming Trump administration (which one can debate if it "drained" the swamp, or alternatively added to it), today at 4:15pm ET (1:15pm PT), bond king Jeff Gundlach kicks off the new year by holding his first for 2017 monthly DoubeLine webcast, titled "Just markets."
Having kept a relatively low profile in the past month, in Gundlach last media appearance, the bond king, after turning more bearish on risk assets in late 2016, told Reuters on December 13 the 10-year Treasury note yield above 3% will harm the stock-market rally and housing market: "I think above 3 percent is a problem," Gundlach told Reuters. "If the 10-year goes above 3 percent, you would also have to say unequivocally you have seen the end of the bond bull market."
During his last webcast, Gundlach also reiterated that Donald Trump's administration will be "bond unfriendly" and investors should brace for a 6 percent 10-year Treasury yield within four to five years.
Gundlach said it is reasonable to be nimble and do some purchasing of Treasuries. "I think it is an okay buy right now," he said. "We hate the market less. We are a little bit less defensive," Gundlach said. Since then the 10Y has traded rangebound. Earlier today, Bill Gross noted that a breakout of the 10Y yield above 2.60% would end the 30 year bull market rally, and would have substantial adverse consequences for all risk assets. On the topic, Gundlach referenced a different level, and said if the 10-year yield exceeds 3 percent next year, high-yield "junk" bonds will drop into a "black hole of illiquidity."
In early December he said that "it is so late to be buying the Trump Trade." That, has so far proven inaccurate with the Dow Jones soaring over 500 points since his statement, and continuing to knock on 20,000s door.
Readers can log into Gundlach's latest live at the following link.