A week before election day, DoubleLine Capital CEO Jeffrey Gundlach is predicting another victory for President Donald Trump.

Despite polls, analysis and betting odds that suggest otherwise, Trump is likely to outpace former Democratic vice president Joe Biden in the contest, said DoubleLine Capital CEO Jeffrey Gundlach in “Hey Kid – Want Some Candy?,” a Tuesday webcast as part of Schwab’s 2020 IMPACT conference.

“The polls right  now say he isn’t going to win, but they said that four years ago,” said Gundlach. “Mind you, my conviction is way lower than it was four years ago. But back in [that period], when Trump was little more than an asterisk in the betting odds, I predicted he was going to win. This one is much more murky, but in my eyes, it favors a Trump win.”

Public political polls are often “designed to create impressions” rather than illustrate reality, said Gundlach, and shouldn’t be trusted. He also argued that many Trump voters are unwilling to engage with pollsters and the media because they fear retribution for their political beliefs. Biden also faces an enthusiasm problem, said Gundlach.

His Tuesday presentation wasn't purely political. Gundlach also offered advisors some unusual asset allocation recommendations.

Gundlach also argued Republicans will likely keep the Senate regardless of who wins – mainly because of uncertainty around Biden. “Some people will hedge their bets and split their vote towards retaining the Republican Senate  because they view Biden as risky,” said Gundlach, who noted that Trump is often portrayed as riskier than Biden.

However, in the four years of his presidency, there have been no international conflicts, despite some outrageous and bellicose language. “You might dislike Trump or some of his policies, but risk is not what you’re getting with him, particularly compared to turning the presidency over to another party, and particularly when that party’s candidate isn’t saying what some of his policy positions are.”

If Biden indeed wins the election and eventually rolls back or eliminates the corporate tax reduction from 2017’s Tax Cuts and Jobs Act, U.S. equity valuations would increase sharply, said Gundlach. But the reduction in after-tax earnings would mean that stock prices would not appreciate. Interest rates, volatility and inflation would also rise, said Gundlach.

“Markets don’t like uncertainty, and with Trump, I think you have more certainty,” said Gundlach. “With Biden, you have peak uncertainty because there’s been very little information given to the public.”

Gundlach clarified that he doesn’t think Biden is a socialist, but that pressured by the Democratic Party’s base, his administration would pursue higher taxation and “socialist policies,” but it’s hard to be sure because Biden has changed many of his positions over his long political career.

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