DoubleLine Capital CEO Jeffrey Gundlach sees change and potential upheaval in 2024, together with a probable U.S. financial downturn and evolving monetary market tendencies.
After robust rallies in late 2023 helped shares and bonds finish the 12 months in constructive territory, markets face new challenges as pandemic results on the financial system recede, the billionaire investor advised.
The COVID-19 pandemic “has distorted a bunch of financial knowledge” and made indicators much less dependable prior to now three years, he mentioned. “However I feel that’s beginning to fade into the background now as we don’t have all of this great sum of money printing that’s been happening.”
On a webcast Tuesday and in associated posts on X from from DoubleLine, Gundlach additionally outlined a number of developments within the credit score market. Amongst these, he mentioned high-yield defaults may improve as lending requirements tighten, though it’ll in all probability take a recession for that to occur.
Funding-grade credit score broadly could yield mid- to high-single digit yields, based on Gundlach. Non-agency residential mortgage-backed securities yields look enticing, whereas industrial mortgage-backed securities are a blended bag, with AAA “fairly protected” and Conduit CMBS A- dealing with defaults, he famous.
Take a look at the gallery for 12 market and financial predictions from Gundlach.