Jeffrey Gundlach, DoubleLine Capital’s chief investment officer, hosts his annual “Just Markets” webcast after markets on Tuesday, offering his outlook for the year ahead.
Here’s what he said last year and what happened as of Dec. 31:
U.S. Equities
Call: Expect a run-up early in 2018, but an eventual reversal that would leave the market down for the year. Outcome: The S&P 500 Index peaked on Sept. 20 and finished with a loss of 4.4 percent, including dividends.
Emerging-Market Equities
Call: Not a great time for traders to be buying, but long-term investors may benefit from attractive valuations relative to the U.S. Outcome: The MSCI EM Index did worse than the S&P 500, dropping 14 percent on a total-return basis; price-earnings ratios still favor emerging markets.
European Equities
Call: A value trap. Outcome: The Euro Stoxx 50 Index lost 16 percent after dividends in dollar terms.
Two-Year Treasuries
Call: Two-year notes could exceed 2.5 percent, but they’re “actually a pretty no-brainer investment” because they offer positive returns if held to maturity, when other assets may be reasonably priced. Outcome: Yields stayed above 2.5 percent from June 11 to Dec. 28 and short-term bond funds generated positive returns.