Just now on CNBC, Jeff Gundlach predicted that the 10-year Treasury yields could rise 100 basis points.Gundlach had been on the bullish side of the Treasury trade (meaning he had been getting on falling rates at the time when Bill Gross was betting on higher rates) and now he thinks that rates are on the rise.
He sees no value in bonds at this point however.
As for QE, he thinks that will cause higher yield prices (“the bloodless verdict of the market”).
As for stocks, he’s not crazy about risk assets at these prices, but in the longer term, thanks to Fed policies he think it’s a good point to buy businesses with growing value.
On Apple; “The obsession with Apple is a truly remarkable social phenomenon… the stock is overbelieved and overbought.”
He advocates pair trades: Short things like Apple and the S&P, and buy stuff like the Spanish market and natural gas.
Gundlach will be back later in the hour.
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