DoubleLine CEO Jeffrey Gundlach stated Tuesday he expects commodities to run greater versus shares.
“Whereas shares have been doing nice, commodities have been doing effectively, too,” Gundlach stated on a webcast. There’s “various excessive octane [gas] within the commodities vs. shares tank.”
Gundlach stated in mid-December on CNBC’s “Halftime Report” that his finest funding concept for 2018 is commodities, equivalent to oil and metals. His thesis is that the relative efficiency of shares to commodities goes via outlined cycles, and that proper now commodities are poised for a interval of outperformance in contrast with shares.
The investor famous Tuesday that international progress is inflicting demand for commodities, whereas the weaker U.S. greenback must also assist.
“Often whenever you get a nasty yr within the greenback, it is adopted by one or two extra dangerous years,” Gundlach stated.
The U.S. greenback index dropped to its lowest in additional than three years final week.
In the meantime, oil costs have recovered over the past two years from a stoop in 2014 and 2015. U.S. crude oil futures for March supply hit a excessive of $66.66 final week, their highest since Dec. 5, 2014.
Whereas Gundlach didn’t remark Tuesday on oil costs, DoubleLine’s Deputy Chief Funding Officer Jeffrey Sherman stated in response to a query on the webcast that “there may be the structural help for oil costs to be the place they’re” and that “the vitality market does nonetheless look fairly enticing.”
The DoubleLine Strategic Commodity Fund I-shares gained 9.13 p.c in 2017, versus the Bloomberg Commodity Index’s 1.7 p.c rise.
U.S. shares tumbled Tuesday, with the S&P 500 falling greater than 1 p.c in its worst day since August.