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Gundlach: Trump victory sets stage for massive bond bear market

Published 11/12/2016, 09:04 AM
Gundlach: Trump victory sets stage for massive bond bear market
TIP
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TBT
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UBT
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DLBS
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TMV
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TLT
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TYBS
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TMF
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TLH
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ZROZ
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TBF
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SPTL
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TTT
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EDV
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VGLT
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DBL
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DLBLF
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  • The president-elect's pro-business agenda is inherently "unfriendly" to bonds, Jeff Gundlach tells Barron's, as it will lead to stronger economic growth and renewed inflation.
  • Look for Trump to "amp up the deficit" to pay for infrastructure and other programs - producing an inflation rate of 3% and nominal GDP growth of 4-6%. Given that, there's no way the 10-year Treasury yield stays near its current level of 2.15%, and it could rise as high as 6% in the next four or five years. [Serious question: How does "amp up the deficit" differ in any way from what was done in 2009? Can anyone say "shovel-ready"?]
  • For now, Gundlach (DFLEX, DBLFX, DBL) remains a fan of TIPS (NYSEARCA:TIP), and has swapped a good deal of his government paper for those inflation-protected securities.
  • ETFs: TBT, TLT, TMV, TBF, EDV, TMF, TTT, ZROZ, VGLT, TLH, UBT, DLBS, TLO, VUSTX, DLBL, TYBS

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