It’s mid-October, and Jeffrey Gundlach is giving a stump speech to a luncheon crowd of about 200 financial advisers and investors at Los Angeles’s City Club. The renowned money manager’s theme: the financial catastrophe on the horizon.
Pacific Investment Management Co. is wagering at least $10 billion in the credit-default swaps market that U.S. corporate bonds will gain as the Federal Reserve extends unprecedented stimulus into 2014, according to traders and investors.
Jeffrey Gundlach, manager of the top-performing DoubleLine Total Return Bond Fund, is planning a new fund that will seek to beat an index that focuses on the cyclically adjusted price-to-earnings ratio for stocks.
Top-tier junk bonds produced safer returns than debt from the most creditworthy borrowers and the U.S. government over the past five years, a period that included the bankruptcy of Lehman Brothers Holdings Inc. and the biggest bond market swings on record.
Hedge funds lifted their bets on a gold rally as signs of an improving U.S. economy drove prices lower in the longest slump since April, while this year’s bullion declines spurred losses for billionaire John Paulson.
Investors cut bullish commodity bets to the lowest in almost six months as U.S. budget talks stalled, increasing concern that lawmakers’ failure to reach an agreement with push the world’s biggest economy back into a recession.