Jeffrey Gundlach, chief executive of DoubleLine Capital, warned on an investor webcast on Tuesday that a reversal of support for Donald Trump could take hold as expectations are dashed that the newly president-elect can quickly spur economic and job growth.
Gundlach, who oversees more than $106 billion at Los Angeles-based DoubleLine, said Trump “does not have a magic wand” to rapidly improve the economy. He said federal programs take time to implement, rising mortgage rates and monthly payments are not positive for the “psyche of the middle class and broadly”, and supporters of defeated Hillary Clinton are not in a mood to spend money.
“Maybe liquor sales will go up,” Gundlach said on the regular investor webcast. “The Trump win is not positive for consumer spending.” Gundlach also said that in the short-term, “It’s way late to be selling bonds and buying stocks. Probably should be doing the opposite.”
Separately, when questioned by email, Gundlach said he is positive on financials and banks because of a “steeper yield curve and less regulation” under a Trump administration.