Interest rates should rise and stocks should temporarily fall this summer, said noted investor, Jeffrey Gundlach.
Gundlach expects the 10-year Treasury yield to move higher, and a summer interest rate rise should "go along with a correction in the stock market."
"I think it's more likely that equities drop when yields are rising," he said in response to a separate question.
The U.S. 10-year Treasury yield was last near 2.28 percent, down from 2.432 percent at the end of last year.
The S&P 500 has not fallen more than 10 percent from a recent high — or fallen into a correction — since February 2016.
Still, "we have no recession in sight. 2Q GDP has a tendency to bounce back," Gundlach said. "So far, the Nasdaq has been more right about the economy than the 10-year which I think has been rallying more on technicals."
Gundlach also said he expects gold to "have another leg up" and oil prices to trend lower over the longer term because of improved technology for extraction.
Source: Bloomberg
Jr Trader Alexander Kumanov
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.