Jeffrey Gundlach Fed Day - CNBC Closing Bell - 12 June 2024

with Scott Wapner,Steve Liesman and Jeffrey Gundlach,founder,CEO and Chief Investment Officer of DoubleLine Capital LP The interview took place in DoubleLine's Los Angeles office.The Federal Reserve left interest rates unchanged at its June meeting.Mr.Gundlach is predicting a recession and is less sure the Federal Reserve will make even one interest rate cut this year.He currently likes investing in gold and India.DoubleLine has a range of mutual funds,closed end funds,exchange traded funds and UCITS.UCITS is a European Union regulatory framework for trading mutual funds. Based in Tampa,Florida,DoubleLine is majority employee owned and employs 248.Oaktree Capital Mangement owns a 20% stake in the firm.

The Global Market Cave-In and Where People Are Hiding

European markets caved in 3.5 % to 16-month lows on fears of further ECB rate cuts;and US stocks followed suit with the S&P 500 slipping 1.42% as falling oil prices and Fed rate increase worries,as well as the overseas weakness,rattled investors on Monday.Concerns are that,in a climate of negative interest rates in Europe and Japan,and prolonged dovish monetary policy,banks' profitability will be squeezed,said Jaisal Pastakia,investment manager at Heartwood Investment Management.According to Michael Bell,global market strategist at JP Morgan Asset Management,the market is pricing in a 50% chance of a European recession.
Both Brent crude and light sweet crude fell about 2.5% Monday,with Brent closing at 33.20 bbl and light sweet crude subsiding to the 30.12 mark.As for the safe havens,London spot gold peaked at 1176.66 an ounce at 1104 GMT,an increase of 0.3% on top of last week's 5 % gain;while NYMEX April gold settled up 3.5% at 1197.00 an ounce,and silver climbed 0.32% to 15.36 an ounce.*
Ian Taylor,CEO of Vitol Group B.V.,the world's largest independent energy trader,believes oil will stay low for the next 10 years.Brent crude will close the year out at 48.00 bbl,Mr.Taylor predicted.The Rotterdam,Netherlands company ships more than 270 million tonnes of crude a year in its fleet of 200 supertankers and other ships.*
Gold has made a spectacular move the past 20 days,said Frank Holmes,CEO of US Global Investors.World trade is still in negative territory,and negative real interest rates are helping gold.As well,there is a strong physical demand for bullion worldwide.US gold coin dealers had their second-best year ever in 2015,despite the price of gold having declined last year.I think it's going to continue to do much better this year than last year,unless some catastrophe happens around the world.China needs to back 3% of its currency with gold,buying all new mine supply.I think 1100 an ounce is the floor price,and it could easily go to 1500 and ounce,Mr.Holmes projected.*
We think there is more upside,said ETF Securities analyst Martin Arnold.The next big level is 1200,but it may take a while to test it.*
The rare stocks that did well in the Dow Jones Industrial Average included Exxon Mobil;Chevron;Apple;Procter&Gamble;and Johnson&Johnson.*
Exxon Mobil (XOM);Apple Computer (AAPL);Procter&Gamble (PG);Johnson&Johnson (JNJ);Chevron (CVX);iShares MSCI Global Silver Miners ETF (SLVP);iShares MSCI Global Gold Miners ETF (RING)

Market Worry Spurs Safe Haven Buying

The S&P 500 Index continued its downward trending Monday,closing down 29.82,or 1.56%.This was based on the decline of light sweet crude below the 30.00 mark,down 2.42% to 29.77 a barrel.Brent crude fell even harder,down 6.62%,but didn't crack the 30.00 threshold,closing at 30.05.Safe havens gold and silver both appreciated,with gold closing at 1108.8 an ounce,up 1.1%;and silver closing at 14.255 an ounce,up 1.444%.*
There is a lot of concern in the markets over the devaluation in China and the collapse of oil,said Bob Baur of Principal Global Investors.We think a huge devaluation is not ahead.I think China is more interested in a stable currency rather than devaluation.We're finally seeing some stability in the commodity markets.We do think 30.00 is low for oil prices.*
Overall,we're not seeing the kind of consumer spending we were expecting.Lending is going up,but consumers are still reducing their spending.China has slowed dramatically,so there's a real concern about growth slowing.There's an awful lot of worry about a global recession.We think growth is being rebalanced.We are in a place where growth is not going to be what it was.The engine is there-it's just not going to be what we're used to.*
We've recapitalised the banks.Private and household debt has come down.Private debt has come down since 2005.*
Australia is doing remarkably well.The job growth there is good.The US economy has been resilient.Consumer spending is robust.It's awfully hard to see a recession occurring there,Mr.Baur noted.*
In the short-term,we could see some short-term rebound;but long-term,we are still bearish over the next 12 months,cautioned Jason Low,equity strategist at DBS Private Bank.*
Market Vectors Gold Miners ETF (GDX),Silver Wheaton Corp (SLW)

Market Fears:It Could Be a Long Way Down

Major global markets largely continued their decline on China and oil collapse fears Monday,although US stock exchanges were closed for the Martin Luther King,Jr. Day holiday.The one exception was the Shanghai Composite Index,which rose 0.47%.The Japanese Nikkei slumped 1.45%,approaching bear territory along with the Australian ASX.The Hong Kong HSI tumbled 1.45%.In Europe,the German DAX fell 0.25%,,while the London FTSE dropped 0.42% and the Paris CAC 40 lost 0.49%.In the commodities space,light sweet crude was down 1.63% and Brent lost 0.55% in anticipation of Iranian production re-entering the market.Natural gas was cheered,however,by the arctic outbreak sweeping into the US East Coast,rising to 2.124,up 1.14%.Gold was virtually flat at 1088.90 an ounce,just a hair down at -0.17%;but silver climbed to 13.94,or 0.32%.
I think there's much more to go,said Bill Fleckenstein,president of Fleckenstein Capital.My real fear is,there's going to be a dislocation,when the market breaks hard and fast.So far this year,it's been sort of a rolling dislocation.I think it's entirely possible to take out the lows of last summer,accelerate and go lower until such time as the Fed panics.*
Intel has been held up by slowing data centre growth.They've got tons of capacity in the place.If people start to waffle over growth,they'll really be in trouble.The world economy is weak.It's a very potent mix and the Fed can't help unless the market goes much lower-so guess what?The market's going much lower.This is much worse than a market correction.I think all these things are in a feedback loop and it's going to get much worse,Mr.Fleckenstein warned.*
iShares Silver Trust(ETF) (SLV)

Stocks Crater on Greece Fears

The S&P 500 Index fell 43.85 on Monday,down 2.09%,on worries that Greece might leave the Euro-zone,or might at least cause unfortunate ripple effects throughout the global economy.The country is expected to miss a Tuesday debt payment of 1.84 billion dollars to the IMF.Technically,that would not be a default,since the IMF payment does not have the status of a bond coupon payment,for instance.Still,it is plenty bad for the stock market,as is the unknown endpoint of Greece's tortured negotiations with its creditors,and the Sunday referendum basically on whether Greece should abandon the euro for its old currency,the drachma.
The run on Greek banks could become contagious,spreading to Spain,Portugal and even Italy.If that happens,the US economy,with its close ties to Europe,could suffer as well.
The market was shaken by S&P's opinion that the probability of the so-called Grexit is 50%,and a commercial default is inevitable within six months.Greece's credit rating was also lowered by S&P to CCC-.
Investors sought refuge in gold,which rose 0.52%,while Treasury bonds were basically flat and utility stocks fell less than the broader market.*
Utilities Select Sector SPDR ETF (XLU),Market Vectors Gold Miners ETF (GDX),SPDR Gold Trust (GLD),iShares 7-10 Year Treasury Bond ETF (IEF)

Investment Ideas February 2015

American Express scored a double beat on its Q4 earnings report.The financial services titan reported earnings of 1.39 a share versus the estimate of 1.38;it had revenue of 9.11 billion versus the 8.53 billion estimate.CEO Ken Chenault attributed the company's success to the gain from the sale of AmEx's stake in Concur Inc;higher card member spending;increased loan balances;tighter control of expenses;and return of profit to shareholders.
There was an eight percent increase in spending by cardholders.*
We like dividend payers,said Doug Sandler,CFA of RiverFront Investment Group in Richmond,Virginia.They'll do fewer stupid things if they have to pay out.We like companies that cater to the middle class-retailers like drug stores,and homebuilders.*
The price of gold has increased this year,according to William Rhind,CEO of World Gold Trust Services.We've seen Russia going into the market buying more gold.I absolutely would agree investors should have 2-10% gold in a well-balanced portfolio.
We're seeing the paradigms of the last couple of years start to be questioned.Gold miners did well during the Great Depression.*
Biotech titan Amgen also reported a double beat.It reported earnings of 2.16 a share versus the estimate of 2.05;and revenue was 5.33 billion versus the estimate of 5.20 billion.The company reaffirmed its full year guidance.Its success was bolstered by drug price increases.*
Rite Aid Corp(RAD),iShares U.S. Home Construction ETF(ITB),Market Vectors Gold Miners ETF(GDX),Amgen(AMGN),American Express(AXP)

Monday Newsline:Hit Shows Canceled by China;Indian Elections End

Gold miner stocks fell in Asia today along with the price of gold on a perceived lessening of tension in Ukraine.Unofficial voting on independence for Eastern Ukraine went ahead,although clashes with Ukrainian troops were reported.There were some long lines at the polls,but voters were seen voting twice.The provisional government in Kiev and Western countries reject the vote as illegitimate and illegal.
The separatists are claiming the voters showed massive support for independence.*
The MSCI Asia Pacific index was down 0.30%.Basic materials declined 1.0% in Australia,with industrial metals falling 2.17%.Basic materials also fell in the Hang Seng Index.*
Four popular American TV shows on webcaster Sohu have been canceled by the Chinese authorities,including "Big Bang Theory." No specific reason was given.China is in transition,said Sohu founder and CEO Charles Zhang.China is in reform.It's very hard to define what is legal and what is illegal.We fight piracy and we get American TV shows into China.Look at how far we've come along,so I am still satisfied,Mr.Charles explained.China is currently drafting rules for streaming video.*
India's month-long national elections are ending today.The fiscal challenges such as inflation must be met after the euphoria of the elections,said Radhika Rao of DBS.The fiscal budget has to be tabled before July.The budget must be based on realistic expectations.
Inflation will be a risk,fueled by unfavourable weather.Rates will be hard to cut with inflation.There are also stalled infrastructure projects and the current accounts deficit.To maintain momentum,the new government must be formed and tackle the issues pretty soon,Ms.Rao pointed out.*
In sport,Lewis Hamilton of Great Britain won the Formula One Spanish Grand Prix in Barcelona Sunday,increasing his lead in the overall standings.It was his fourth straight victory.His teammate Nico Rosberg of Germany came in second,and Australia's Daniel Ricciardo took third on the podium.
Another German,golfer Martin Kaymer,won The Players Championship at TPC Sawgrass in Ponte Vedra Beach,Florida.It was the second biggest win for Kaymer,who has also won the PGA Championship,a major.American Jim Furyk came in second,and Sergio Garcia of Spain took third place on the leader board.

Monday Newsline:Ukraine and Market Risk

Overnight,the Asian markets reflected anxiety over the Ukraine crisis as shares dropped in Japan and Hong Kong,along with US stock futures,and gold crested to a six month high.Oil rose as well.Now the vote for Crimea's annexation by Russia-totally dismissed by the West as a charade-has gone Moscow's way,unresolved issues both within Crimea itself and in Eastern Ukraine could rivet the attention of global markets in the days ahead.
The Crimean vote went 95% for seceding from Ukraine and joining Russia in an atmosphere of haste and armed intimidation by Russian troops,who were posted in armoured personnel carriers outside polling places.Anti-Putin activists and even some journalists were harassed,beaten and branded as traitors in the days leading up to the election.It was only safe for peaceful protestors on the outskirts of town,fearful of club-wielding toughs inspired by the Kremlin.
Largely unreported on TV news,the tension between Ukraine and Russia over Eastern and Southern Ukraine could make Crimea look like a picnic,with concentrations of troops on both sides mobilising in recent days.In Southern Ukraine,80 Russian troops occupied a village with a natural gas station over the weekend.The Eastern cities of Donetsk,Kharkiv and Lugansk are also potential flashpoints,threatening to become the biggest challenge to market sentiment since the dark days of the Eurozone crisis,as Nicholas Spiro of Spiro Sovereign Strategists put it.
A Russian invasion of Eastern Ukraine could raise geopolitical strife to a new high and ripple strongly through the global markets.
With worries around certain emerging markets,notably China and Ukraine at present-2014 is already shaping up as a more volatile year for shares,said Shane Oliver,head of investment strategy and chief economist at AMP Capital.
Investors may be looking over their shoulders at these exogenous events for the foreseeable future.

Resilient Markets Recover From Ukraine Drop

World markets turned positive in Asia and Europe Tuesday,convinced there won't be military clashes anytime soon over the Ukraine crisis.The Nikkei went up 0.47 and the Hong Seng rose 0.70,optimistic that a standoff in Crimea will not escalate today as Russian President Vladimir Putin ordered Russian troops to halt their exercises in Western Russia and return to base,although there is no sign of an end to the crisis,either.
US Secretary of State John Kerry departed for Kiev talks with Ukraine's interim government Monday night,raising hopes of diplomatic progress.
US stock futures followed suit,recovering most of Monday's losses,as did European indexes.The FTSE was up 1.05 as of time of publication,and the CAC rose 1.15,while the DAX climbed 0.75.The underlying sentiment in markets is bullish,and they are not going to let Ukraine end the trend unless there are further developments.
At the same time,gold and oil prices declined as traders' fears of a shooting war eased-at least momentarily.Gold was near a four month high at close of trading Monday.

Where To Invest;Sochi Medal Count;Julia Mancuso

We'll end the year with high single digit gains,predicts Kevin Mahn,President and CIO at Hennion&Walsh Asset Management.I think there is upside,but I believe there's more pullback in the market because we haven't reached certainty about the debt ceiling and the market hasn't adjusted to new Fed Chairman Janet Yellen yet.*
I think this is the year for diversification again.People forgot about asset allocation last year,with the market up 30%.You have to be nimble.You have to be active,and you can't concentrate on just one asset class.You have to look at alternative assets like gold and REITs.I would say the housing recovery isn't over,with the REITs.We actually favour Europe over the US this year,even though we're bullish on the US,Mr.Mahn said on CNBC.*
Sochi Winter Olympics Total Medal Count as of Friday morning:
1.Canada 7
1.Netherlands 7
1.Norway 7
2.Russia 6
3.USA 5
4.Austria 3
4.Czech Republic 3
5.France 2
6.Germany 2
6.Sweden 2
Canada has the most gold medals(3).*
America's Julia Mancuso,29,won the bronze in the women's Super Combined alpine skiing event,which combines downhill with slalom.She now has won each Olympic medal in her career,including two bronze,making her the most decorated female alpine skier in US history.I can't even believe it,Mancuso said.It was such a tough slalom.*
The effervescent Mancuso attributes her Olympics success to having grown up in the Squaw Valley ski resort of Lake Tahoe,California,site of the 1960 Winter Olympics.Jamie Anderson,who won the first gold medal in the female slopestyle snowboard event the day before,also hails from the Lake Tahoe area.*
Canada's Charles Hamelin won his third gold medal in the 1500 meter speedskating event,tying the record for most gold medals won in a single event.Hamelin,29,is from Sainte-Julie,Quebec.

Emerging Markets Slide;Gold Sales,London Homes Up

Emerging market stocks declined markedly in early Monday trading.The problem is,emerging markets have not addressed their domestic issues.They don't have very strong growth momentum.They really have to look at their own economies,and not blame the Federal Reserve or other developed markets,an analyst at Bank Julius Baer noted.*
Australia's sovereign wealth fund racked up record gains in 2013.As well,the Perth Mint,a refiner of gold and silver bullion into coins and bars,has posted higher sales for January as gold prices rose.Sales climbed 10% as investors sought refuge from an equities market weakened by slowing Chinese growth and Fed tapering.The price of gold fell 28% last year,but has risen 3% so far in 2014.*
Two trillion dollars of equity have been lost since the Fed started tapering its bond buying programme.We've had PE multiple expansion in markets without the earnings to back it up,points out Nick Xanders,global equity strategist at BTIG.
Both the Thai baht and stock market staged a relief rally Monday when national elections went off peacefully,although many polling places were blockaded by opposition protestors.*
Rubber prices dropped to a 16 month low on the Chinese manufacturing pullback.*
London home prices are surging because of an influx of Asian buyers.There are fears a housing bubble may be in the making.*

Asia This Day:Chinese Reforms Spur Stocks;Indian Gold Sales Strong;Inbee Park

The Beijing leaders are promising sweeping reforms in China in the wake of the Communist Party plenum.They will allow more private investment in state-owned enterprises;relax the one-chuild policy;expand the land rights of farmers;allow local governments to issue debt;rate officials on borrowing levels and other metrics.In response,most Asian markets rose in early Monday trading.The MSCI Asia Pacific Index gained 0.9% by early afternoon,with all 10 industry groups up.*
Indian families continue to bedeck their daughters with gold jewelry for their weddings,in spite of government efforts to reduce the purchase of imported gold.Gold bangles,necklaces,rings,tiaras and earrings are all in great demand this year.
Gold represents the status of the Indian family,the pride they take in themselves.Indian brides wear as much gold as their families can afford.A few hundred grams of gold would be a moderate purchase in one father's opinion.That's about thirty-two ounces.
The government raised import taxes three times this year in an attempt to reduce the current accounts deficit.According to the World Gold Council,however,Indian families continue to buy gold at a brisk pace.Demand will be up from 864.2 tonnes last year to 900-1,000 tonnes in 2013.*
South Korean Inbee Park won the LPGA Tour Rolex Player of the Year award Sunday-the overall season championship-after placing fourth at the Lorena Ochoa Invitational Presented by Banamex in Guadalajara,Mexico.Park is the first Korean ever to win the award.She's scored 6 victories this season-including 3 majors,giving her the most overall points.
American teenager Lexi Thompson won the tournament.

Should You Invest in CME Group

CME Group is a global futures exchange.It trades futures and options on currencies,commodities,interest rates,stock indexes and agricultural commodities.
We saw a real downturn in 2012.Our volumes are OK.There's been a lot of activity in energy and foreign exchange,said Terry Duffy,CME Group CEO.Gold coins didn't trade down.They're of more value than anything else.
Operational risk is what we all have.We're deploying so much technology on a daily basis.It allows us to be in 150 countries.The single largest investment CME has made in 150 years is technology.It's very expensive.
We pay one of the biggest dividends in the S and P 500.We feel very confident we've put the pieces together,that we can compete with anybody.
It's getting a little crowded,but that's alright.We have innovated for over a hundred years because of competition,and we think it's good,Mr.Duffy explained.
CME had a rough Q1.Profit was down 12.0%;revenue dropped 7.0% and trading fees declined.The stock was up 0.53% in Monday trading.CME has a market cap of 20.35 billion dollars.
CME Group,Inc(CME)

Malaysian Election,US Jobs Lift Asian Markets

Asian markets were up in early Monday trading on optimism over Malaysian election results and the apparent US recovery,with the MSCI Asia Pacific index rising 0.24%.The encouraging employment report on Friday reinforces the idea that the US economy is going along at a decent clip,said Binay Chandgothia, a portfolio manager at Principal Global Investors.
By and large,we expect the US economy will grow in the second half.Natural gas is cheaper and corporates are spending on buybacks and dividend increases.The US energy markets long term do look to be positive.
People have been taking money out of emerging Asia and putting into the US and Japan.Over the next three months,China could provide growth as they are letting their economy take its own course.
The Kuala Lumpur Composite Index soared 3.0% along with the ringgit,the Malaysian currency,as the government of Prime Minister Najib Razak was re-elected,albeit by a smaller majority this time.Opposition leader Anwar Ibrahim bitterly criticised the ruling party for rigging the election by busing foreign voters in to slant the results,as well as playing the racist card against the country's Chinese minority.
India's Nifty Fifty futures index rose,indicating that a three week rally would be extended.
The Reserve Bank of India is restricting the purchase of gold on consignment by banks.It is to be allowed only for jewelry exporters with a genuine need,in order to bring down the current accounts deficit.The RBI had previously halted banks from lending for the purchase of gold in any form.
India is the world's largest gold consumer.Gold has been scarce there recently on strong demand.The Akshaya Tritiya festival on May 13 is the traditional day for buying precious metals in India.
Japanese stock markets are closed Monday for Children's Day.

Asia This Day:Sunny Asian Markets;New Zealand Deals With Downpour

The Australian and New Zealand dollars rose Monday on the recovery of risk appetite.
New Zealand is expecting more heavy rainfall as residents assess the damage from a weekend deluge.At least 90 homes in the Tasman district experienced some flooding,and swells of up to four metres were noted at Astrolabe Reef in the Bay of Plenty.
There was also concern that a cargo of plastic beads was spreading over beaches after a shipping container aboard the shipwreck Rena was damaged by the storm.
India's Nifty Fifty index rose 0.55% Monday with most sectors showing strength,except for the IT sector that was dragging the market down a bit.Reliance was up 0.99% and Bharat Petroleum climbed 0.90%.
The MSCI Asia Pacific index rose 0.6% ,led by consumer and telecoms shares.Asian stocks were up generally Monday on Japanese exporters rallying because of the weak yen,as the G20 developed nations didn't object to Japan's policy stimulus.The G20 feel that the Bank of Japan's plan to buy seven trillion yen,or 70.02 billion dollars,of bonds per week will boost both the Japanese recovery and the global economy,according to Rajiv Biswas,chief economist for the Asia Pacific at IHS Global Insight.
The Nikkei 225 index rose 2.00%,while the ASX 200 gained 0.49%.Gold surged 1.78% to 1420.40 an ounce as hedge funds found it to be a bargain after last week's collapse.

The Outlook For Gold

Central banks turned net purchasers of gold in 2010,and that trend has continued,said Natalie Dempster of the World Gold Council.Stimulative policies are pushing investors into gold,along with the fiscal cliff.Concerns over credit have stopped the trend of investing in eurobonds.
Strong economic growth has been underpinning jewelry and central bank gold reserves demand from countries such asThailand and Russia.It's really been very broad-based.
At the moment,gold is a very good inflation hedge.It's a much better diversifier than other commodities because they are linked to industrial applications.
Monday New York gold closed at 1728.80 an ounce.

Asia This Day:Fiscal Cliff Troubles Australia;Tokyo Nuclear Protest

Tens of thousands clogged Tokyo Monday as they protested Japan's restarting of reactors in the wake of 2011's tsunami and nuclear disaster.Two of the country's fifty reactors are back on line at the Ohi plant.
Japan's GDP came in lower than expected at -3.5 versus the -3.4 estimate,on falling exports to a slowing China and Chinese protests against Japan's territorial claims.Consumer spending has also dropped,further shrinking the Japanese economy.The Nikkei was down 61.04 after the lunch break Monday.
The MSCI Asia Pacific index fell 0.30% in early Monday trading,while India's Nifty Fifty and Sensex indexes rose about 0.20%.A big wireless spectrum auction is being conducted by the Indian government.
Toyota  Motors will be doubling its capacity in Indonesia,building a new engine plant there.
Australian treasurer Wayne Swan has been warning about the results of the fiscal cliff,a combination of  US tax increases and spending cuts of some 800 billion dollars that will apply on January 1.Without action by Congress,there would be a severe blow to the fragile global economy.The world can't afford the continuation of this gridlock in Washington.Mr.Swan has met with US Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke to express his concern.
Gold is at a near three-week high on the fiscal cliff worry.
China's trade surplus came in at 32 billion dollars in October,a rise of 11.6%.Copper imports were down to their lowest level in 15 months,dropping 18%.Australian mining shares have declined because of the Chinese slowdown.