Latest news with #DoubleLine
Yahoo
a day ago
- Business
- Yahoo
Legendary fund manager sends blunt 3-word message on economy
Legendary fund manager sends blunt 3-word message on economy originally appeared on TheStreet. There's been considerable debate over the US economy this year. After delivering solid growth in 2024 that propelled the S&P 500 up 24%, worries have mounted that President Trump's tariffs scheme could fuel inflation, crimp spending, and send the economy, stocks, and bonds into a tailspin. Those favoring tariffs argue they're the best way to strong-arm manufacturing back to America, while opponents say they're inflationary impact couldn't happen at a worse time, given increasing will take time to determine who is correct. Factories take considerable time to build, and most economists think tariffs' inflation impact on business and consumer spending trends won't really be felt until later this year. There's also the chance that future trade deals reduce the tariff bite. However, that argument lost some of its strength this week when President Trump said that ongoing negotiations with China wouldn't result in lower tariffs on Chinese imports. Undeniably, this dynamic means there's significant uncertainty, and historically, that's not a great recipe for a strong economy or stock market. The potential for the US economy to cause problems for stocks and bonds isn't lost on billionaire hedge fund manager Jeffrey Gundlach, the founder of DoubleLine, a hedge fund with over $90 billion in assets under management. Gundlach recently offered a blunt assessment of the market's future, and given his professional experience since the mid-1980s, investors ought to consider his advice carefully. A flood of monetary and fiscal stimulus saved the US economy from a Covid-driven depression in 2020, but it sparked runaway inflation that forced the Federal Reserve to employ the most hawkish rate hikes since the 1980s when Fed Chair Paul Volcker won a war against skyrocketing inflation. The Fed's rate hikes worked, given that inflation has fallen below 3% from over 8% in 2022, but they've done so at a cost. The drag of higher rates has caused layoffs, lifting the US unemployment rate to 4.2% from 3.4% in uptick in joblessness prompted Fed Chair Jerome Powell to switch gears again, cutting rates last September, November, and December. However, those cuts have yet to improve employment meaningfully, and they've arguably set the stage for inflation to reassert itself. President Trump's tariff plans compound the worry over inflation. In February, he enacted 25% tariffs on Canada and Mexico. In April, he announced 25% tariffs on autos. While he's temporarily walked back the worst of his reciprocal tariffs, a 10% baseline tariff and a roughly 55% US tariff on China remain. Those tariffs pose a high threat to the US economy. Since China joined the World Trade Organization in 2001, the US and China have become increasingly entwined. Most US companies, including manufacturers, source goods from China, especially automakers and retailers whose supply chains are particularly reliant. The rising costs associated with higher import taxes will likely force companies to raise consumer prices or take a hit to their bottom line. Higher prices will likely crimp revenue growth, while smaller profit margins reduce earnings. That's not a great backdrop for higher stock prices, given revenue and profit growth are cornerstones of stock market valuation. Perhaps unsurprisingly, the situation has affected consumer confidence. The Conference Board's closely watched Expectations Index was 72.8 last month, below the threshold of 80 that often signals a looming recession. Gundlach's forty-year career managing money means he's seen a thing or two. His position at the top of one of the largest hedge funds gives him insight across sectors, industries, and asset not a fan of what's happening. And unlike during Covid, the US isn't nearly in the shape it was to prevent any future recession with stimulus, given the size of the U.S. debt pile. 'There's an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset,' said Gundlach in a Bloomberg interview. "It's not responding to lower interest rates." If true, that would mark a major shift. Historically, global investors have sought safety in Treasuries, viewing them as essentially risk-free assets. "In the last 15 years, there have been a number of corrections in the S&P 500, and in every single one of them, when the S&P 500 goes down more than 10%, the trade-weighted dollar index goes up. This time the Dollar went down... Usually, when the Fed starts cutting interest rates, rates across the yield curve go time, the 10-year went up," noted Gundlach. More Economic Analysis: Hedge-fund manager sees U.S. becoming Greece A critical industry is slamming the economy Reports may show whether the economy is toughing out the tariffs Gundlach worries that yields on US Treasuries could rise significantly, reaching 6%. That would be good news for retirees pocketing fixed income, but it would be a major headwind for corporations and households who became addicted to the Fed's previous zero-interest rate policy, or ZIRP. "The interest expense for the United States is untenable if we continue running a $2.1 trillion budget deficit," said Gundlach. The 10-year Treasury note and 30-year Treasury bond yields are currently 4.39% and 4.88%. The 10-year Treasury yield is often used to inform mortgage rates, so a big uptick in its yields would send ripples through the housing market. He also thinks we may have seen the low in inflation for now, suggesting household budgets will get more crimped. "We're likely seeing the low point in near-term inflation," said Gundlach. Overall, Gundlach offered a blunt conclusion: "A reckoning is coming.'Legendary fund manager sends blunt 3-word message on economy first appeared on TheStreet on Jun 12, 2025 This story was originally reported by TheStreet on Jun 12, 2025, where it first appeared. Sign in to access your portfolio
Miami Herald
a day ago
- Business
- Miami Herald
Billionaire fund manager sends blunt 3-word message on economy
There's been considerable debate over the US economy this year. After delivering solid growth in 2024 that propelled the S&P 500 up 24%, worries have mounted that President Trump's tariffs scheme could fuel inflation, crimp spending, and send the economy, stocks, and bonds into a tailspin. Those favoring tariffs argue they're the best way to strong-arm manufacturing back to America, while opponents say they're inflationary impact couldn't happen at a worse time, given increasing unemployment. Related: Billionaire fund manager sends strong message on Fed Chair Powell's future It will take time to determine who is correct. Factories take considerable time to build, and most economists think tariffs' inflation impact on business and consumer spending trends won't really be felt until later this year. There's also the chance that future trade deals reduce the tariff bite. However, that argument lost some of its strength this week when President Trump said that ongoing negotiations with China wouldn't result in lower tariffs on Chinese imports. Undeniably, this dynamic means there's significant uncertainty, and historically, that's not a great recipe for a strong economy or stock market. The potential for the US economy to cause problems for stocks and bonds isn't lost on billionaire hedge fund manager Jeffrey Gundlach, the founder of DoubleLine, a hedge fund with over $90 billion in assets under management. Gundlach recently offered a blunt assessment of the market's future, and given his professional experience since the mid-1980s, investors ought to consider his advice carefully. CNBC/Getty Images A flood of monetary and fiscal stimulus saved the US economy from a Covid-driven depression in 2020, but it sparked runaway inflation that forced the Federal Reserve to employ the most hawkish rate hikes since the 1980s when Fed Chair Paul Volcker won a war against skyrocketing inflation. The Fed's rate hikes worked, given that inflation has fallen below 3% from over 8% in 2022, but they've done so at a cost. The drag of higher rates has caused layoffs, lifting the US unemployment rate to 4.2% from 3.4% in 2023. Related: Surprising inflation, China news sends S&P 500 stumbling The uptick in joblessness prompted Fed Chair Jerome Powell to switch gears again, cutting rates last September, November, and December. However, those cuts have yet to improve employment meaningfully, and they've arguably set the stage for inflation to reassert itself. President Trump's tariff plans compound the worry over inflation. In February, he enacted 25% tariffs on Canada and Mexico. In April, he announced 25% tariffs on autos. While he's temporarily walked back the worst of his reciprocal tariffs, a 10% baseline tariff and a roughly 55% US tariff on China remain. Those tariffs pose a high threat to the US economy. Since China joined the World Trade Organization in 2001, the US and China have become increasingly entwined. Most US companies, including manufacturers, source goods from China, especially automakers and retailers whose supply chains are particularly reliant. The rising costs associated with higher import taxes will likely force companies to raise consumer prices or take a hit to their bottom line. Higher prices will likely crimp revenue growth, while smaller profit margins reduce earnings. That's not a great backdrop for higher stock prices, given revenue and profit growth are cornerstones of stock market valuation. Perhaps unsurprisingly, the situation has affected consumer confidence. The Conference Board's closely watched Expectations Index was 72.8 last month, below the threshold of 80 that often signals a looming recession. Gundlach's forty-year career managing money means he's seen a thing or two. His position at the top of one of the largest hedge funds gives him insight across sectors, industries, and asset classes. Related: CPI inflation report resets interest rate cut bets He's not a fan of what's happening. And unlike during Covid, the US isn't nearly in the shape it was to prevent any future recession with stimulus, given the size of the U.S. debt pile. "There's an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset," said Gundlach in a Bloomberg interview. "It's not responding to lower interest rates." If true, that would mark a major shift. Historically, global investors have sought safety in Treasuries, viewing them as essentially risk-free assets. "In the last 15 years, there have been a number of corrections in the S&P 500, and in every single one of them, when the S&P 500 goes down more than 10%, the trade-weighted dollar index goes up. This time the Dollar went down... Usually, when the Fed starts cutting interest rates, rates across the yield curve go time, the 10-year went up," noted Gundlach. More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs Gundlach worries that yields on US Treasuries could rise significantly, reaching 6%. That would be good news for retirees pocketing fixed income, but it would be a major headwind for corporations and households who became addicted to the Fed's previous zero-interest rate policy, or ZIRP. "The interest expense for the United States is untenable if we continue running a $2.1 trillion budget deficit," said Gundlach. The 10-year Treasury note and 30-year Treasury bond yields are currently 4.39% and 4.88%. The 10-year Treasury yield is often used to inform mortgage rates, so a big uptick in its yields would send ripples through the housing market. He also thinks we may have seen the low in inflation for now, suggesting household budgets will get more crimped. "We're likely seeing the low point in near-term inflation," said Gundlach. Overall, Gundlach offered a blunt conclusion: "A reckoning is coming." Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
2 days ago
- Business
- Yahoo
DoubleLine's Gundlach Says ‘Reckoning Is Coming' for US Debt
(Bloomberg) -- America's debt burden and interest expense have become 'untenable,' a situation that may lead investors to move out of dollar-based assets, according to DoubleLine Capital's Jeffrey Gundlach. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban NY Long Island Rail Service Resumes After Grand Central Fire Do World's Fairs Still Matter? 'There's an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset,' the veteran bond manager said Wednesday in an interview at the Bloomberg Global Credit Forum in Los Angeles. A 'reckoning is coming.' In a wide-ranging discussion that also touched on gold's attractiveness, stretched market valuations, the state of private credit, artificial intelligence and long-term investment opportunities in India, Gundlach said investors should consider increasing their non-dollar-based holdings, adding that his firm was starting to introduce foreign currencies into its funds. His comments came a day before a closely watched auction for 30-year Treasury bonds. Gundlach, 65, likened today's market to the environment in 1999, just before the dot-com bust, as well as 2006 and 2007 before the global financial crisis. Going further, he said the booming private credit sector is analogous to the market for collateralized debt obligations, or CDOs, in the mid-2000s, 'where there's just tremendous issuance, there's tremendous acceptance.' The investor noted that public credit markets have outperformed their private counterparts in recent months, and sees 'overinvestment' — and a risk of forced selling — in the latter. 'I just don't think the excess reward is anything close to what it used to be,' Gundlach said. He cited possible selling of private assets by US institutions such as Harvard University, which has explored offloading part of its endowment's private equity holdings as the Trump administration cuts off grants and funding. Gundlach founded DoubleLine in 2009 after a contentious exit from TCW, where he'd become a star bond manager. DoubleLine managed $93 billion in assets and had more than 250 employees as of March. The firm and its founder haven't shied away from bold takes. Gundlach, who called Donald Trump's first presidential win in 2016, gave the Federal Reserve an F grade in September for its response to the economy as he correctly predicted a half-point rate cut, and earlier this year the firm posed an open question of whether Microsoft Corp. debt was safer than Treasuries. Next Stop 6%? As for Treasury debt, Gundlach said yields on long-term bonds could continue to rise as the economy starts to weaken. If yields reached 6%, that could prompt the Federal Reserve to step in and start quantitative easing, buying long-term Treasuries to rein in borrowing costs. DoubleLine and peers including Pacific Investment Management Co. and TCW Group Inc. have been avoiding the longest-dated US government bonds in favor of shorter maturities that carry less interest-rate risk in the face of spiraling federal debt and deficits. US 30-year yields touched a near two-decade high of 5.15% last month, and traded at around 4.9% on Thursday. In a telling sign, yields on the long-term benchmark are higher year to date, even as rates on shorter-term Treasuries have fallen. While known for his fixed-income calls, Gundlach has grown more bullish on gold, doubling down on its status as a 'real asset class' and one that is 'no longer for lunatic survivalists' and speculators. 'We have a tremendous paradigm shift where money is not coming into the United States, and gold is suddenly the flight to quality asset,' he said. Gundlach previously predicted that the price of gold would shatter records, as happened this year, and in May, he told CNBC that the precious metal could swell to $4,000 per ounce, up from about $3,350 now. He also pointed to India as one of the 'most bankable' long-term investment opportunities. 'The way to invest in periods like this is to go with long-term themes,' Gundlach said. 'It might take 30 years, but you should invest in India because it has a similar profile today that China had 35 years ago.' --With assistance from Elizabeth Campbell, Loukia Gyftopoulou and Michael Mackenzie. (Adds the 30-year Treasury auction in the third paragraph.) New Grads Join Worst Entry-Level Job Market in Years American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
2 days ago
- Business
- Mint
DoubleLine's Gundlach Says ‘Reckoning Is Coming' for US Debt
America's debt burden and interest expense have become 'untenable,' a situation that may lead investors to move out of dollar-based assets, according to DoubleLine Capital's Jeffrey Gundlach. 'There's an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset,' the veteran bond manager said Wednesday in an interview at the Bloomberg Global Credit Forum in Los Angeles. A 'reckoning is coming.' In a wide-ranging discussion that also touched on gold's attractiveness, stretched market valuations, the state of private credit, artificial intelligence and long-term investment opportunities in India, Gundlach said investors should be considering non-dollar-based holdings, adding that his firm was starting to introduce foreign currencies into its funds. Gundlach, 65, likened today's market to the environment in 1999, just before the dot-com bust, as well as 2006 and 2007 before the global financial crisis. Going further, he said the booming private credit sector is analogous to the market for collateralized debt obligations,or CDOs, in the mid-2000s, 'where there's just tremendous issuance, there's tremendous acceptance.' The investor noted that public credit markets have outperformed their private counterparts in recent months, and sees 'overinvestment' — and a risk of forced selling — in the latter. 'I just don't think the excess reward is anything close to what it used to be,' Gundlach said. He cited possible selling of private assets by US institutions such as Harvard University, which has explored offloading part of its endowment's private equity holdings as the Trump administration cuts off grants and funding. Gundlach founded DoubleLine in 2009 after a contentious exit from TCW, where he'd become a star bond manager. DoubleLine managed $93 billion in assets and had more than 250 employees as of March. The firm and its founder haven't shied away from bold takes. Gundlach, who called Donald Trump's first presidential win in 2016, gave the Federal Reserve an F grade in September for its response to the economy as he correctly predicted a half-point rate cut, and earlier this year the firm posed an open question of whether Microsoft Corp. debt was safer than Treasuries. As for Treasury debt, Gundlach said yields on long-term bonds could continue to rise as the economy starts to weaken. If yields reached 6%, that could prompt the Federal Reserve to step in and start quantitative easing, buying long-term Treasuries to rein in borrowing costs. DoubleLine and peers including Pacific Investment Management Co. and TCW Group Inc. have been avoiding the longest-dated US government bonds in favor of shorter maturities that carry less interest-rate risk in the face of spiraling federal debt and deficits. US 30-year yields touched a near two-decade high of 5.15% last month, and traded at 4.91% as of Wednesday. In a telling sign, yields on the long-term benchmark are higher year to date, even as rates on shorter-term Treasuries have fallen. While known for his fixed-income calls, Gundlach has grown more bullish on gold, doubling down on its status as a 'real asset class' and one that is 'no longer for lunatic survivalists' and speculators. 'We have a tremendous paradigm shift where money is not coming into the United States, and gold is suddenly the flight to quality asset,' he said. Gundlach previously predicted that the price of gold would shatter records, as happened this year, and in May, he told CNBC that the precious metal could swell to $4,000 per ounce, up from about $3,350 now. He also pointed to India as one of the 'most bankable' long-term investment opportunities. 'The way to invest in periods like this is to go with long-term themes,' Gundlach said. 'It might take 30 years, but you should invest in India because it has a similar profile today that China had 35 years ago.' With assistance from Elizabeth Campbell, Loukia Gyftopoulou and Michael Mackenzie. This article was generated from an automated news agency feed without modifications to text.
Associated Press
02-06-2025
- Business
- Associated Press
DoubleLine Yield Opportunities Fund Declares June 2025 Distribution
TAMPA, Fla., June 2, 2025 /PRNewswire/ -- The DoubleLine Yield Opportunities Fund (the 'Fund'), which is traded on the New York Stock Exchange under the symbol DLY, has declared a distribution of $0.1167 per share for the month of June 2025. The distribution is subject to the following ex-dividend, record and payment dates set by the Fund's Board of Trustees. This news release is not for tax reporting purposes. The news release has been issued to announce the amount and timing of the distribution declared by the Board of Trustees. Distributions may include ordinary income, capital gains or return of capital. The amount of distributable income and the tax characteristics of the Fund's distributions are determined at the end of the taxable year. In early 2026, the Fund will send shareholders a Form 1099-DIV specifying how the distributions paid by the Fund during the prior calendar year should be characterized for purposes of reporting the distributions on a shareholder's tax return. About DoubleLine Yield Opportunities Fund The Fund's investment objective is to seek a high level of total return, with an emphasis on current income. DoubleLine believes active asset allocation across a broad range of fixed income sectors with a disciplined approach to risk management offers value-added opportunities for both income and capital growth. The Fund cannot ensure that it will achieve its investment objective, and investing in the Fund involves risks, including the risk that you may receive little or no return on your investment or that you may lose part or even all of your investment. About DoubleLine Capital LP DoubleLine Capital is an investment adviser registered under the Investment Advisers Act of 1940. DoubleLine's offices can be reached by telephone at (813) 791-7333 or by email at [email protected]. Media can reach DoubleLine by email at [email protected]. DoubleLine® is a registered trademark of DoubleLine Capital LP. To read about the DoubleLine Yield Opportunities Fund, please access the Semiannual and Annual Reports, when available, at or call 877-DLINE11 (877-354-6311) to receive a copy. Investors should consider the Fund's investment objective, risks, charges and expenses carefully before investing. An investment in the Fund should not constitute a complete investment program. This document is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale or offer of these securities, in any jurisdiction where such sale or offer is not permitted. Fund investing involves risk. Principal loss is possible. Shares of closed-end investment companies frequently trade at a discount to their net asset value, which may increase investors' risk of loss. This risk may be greater for investors expecting to sell their shares in a relatively short period after the completion of the public offering. There are risks associated with investment in the fund. An investment in the Fund involves certain risks arising from, among other things, the Fund's ability to invest without limit in debt securities that are at the time of investment rated below investment grade or unrated securities judged by DoubleLine to be of comparable quality (a category of investment that includes securities commonly referred to as 'high yield' securities or 'junk bonds'). Securities of below investment grade quality are regarded as having predominantly speculative characteristics with respect to the issuer's capacity to pay interest and to repay principal when due. An investment in the Fund is also subject to the risk of the use of leverage. Investments in debt securities typically decline in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of including credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Past performance is no guarantee of future results. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. Investments in lower rated and non-rated securities present a greater risk of loss to principal and interest than higher rated securities. Investment strategies may not achieve the desired results due to implementation lag, other timing factors, portfolio management decisions-making, economic or market conditions or other unanticipated factors. In addition, the Fund may invest in other asset classes and investments such as, among others, REITs, credit default swaps, short sales, derivatives and smaller companies which include additional risks. The Fund is a non-diversified, limited term, closed-end management investment company. This material may include statements that constitute 'forward-looking statements' under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Fund, market or regulatory developments. The views expressed herein are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed herein are subject to change at any time based upon economic, market, or other conditions and DoubleLine undertakes no obligation to update the views expressed herein. While we have gathered this information from sources believed to be reliable, DoubleLine cannot guarantee the accuracy of the information provided. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed herein (including any forward-looking statements) may not be relied upon as investment advice or as an indication of the Fund's trading intent. Information included herein is not an indication of the Fund's future portfolio composition. Distributions include all distribution payments regardless of source and may include net income, capital gains, and/or return of capital (ROC). ROC should not be confused with yield or income. The Fund's Section 19a-1 Notice, if applicable, contains additional distribution composition information and may be obtained by visiting Final determination of a distribution's tax character will be reported on Form 1099 DIV and sent to shareholders. On a tax basis, as of May 30, 2025, the estimated component of the cumulative distribution for the fiscal year-to-date would include an estimated return of capital of $0.0384 (4%) per share. This amount is an estimate and the actual amounts and sources for tax reporting purposes may change upon final determination of tax characteristics and may be subject to changes based on tax regulations. Any tax or legal information provided is merely a summary of our understanding and interpretation of some of the current income tax regulations and is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice. Foreside Funds Services, LLC provides marketing review services for DoubleLine Capital LP. ©2025 DoubleLine Capital LP. View original content to download multimedia: SOURCE DoubleLine
