Title: DoubleLine’s Gundlach Finds Treasurys “Attractive” in Short Term, Applauds Fed Decision
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DoubleLine’s Gundlach says Treasurys look “attractive” at the moment, praises Fed decision
In a recent interview on CNBC’s “Closing Bell,” DoubleLine’s founder and CEO Jeffrey Gundlach expressed optimism about the current outlook for Treasury bonds. According to Gundlach, Treasurys are currently attractive, particularly in the short term. However, he cautioned about the potential long-term risks associated with rising interest expenses as bond yields increase.
Gundlach praised the Federal Reserve’s decision to maintain steady rates in September. Describing the decision as one of the best in recent times, he highlighted the upgraded forecasts for next year and the positive indicators of the economy, including a stronger economy and better unemployment rates.
The announcement from the Federal Reserve regarding plans for another rate hike before the end of 2023 led to a rise in Treasury yields. This increase pushed the yields on the 2-year and 10-year Treasurys to multi-year highs.
Market choppiness could be around the corner, says NorthEnd Private Wealth CIO
Despite the Federal Reserve’s decision to avoid a rate hike in September, Alex McGrath, Chief Investment Officer for NorthEnd Private Wealth, warns of a potential increase impacting the stock market as the year concludes. McGrath stated that 12 out of 19 governors currently favor at least one more interest rate increase in the next two meetings by the end of the year.
McGrath anticipates a more turbulent end to the year due to elevated rate expectations. This outlook creates uncertainty for growth assets that have driven the market throughout 2023.
Stocks making the biggest moves after hours: FedEx, KB Home, and Klaviyo
After the market closed, several stocks experienced notable movements:
1. FedEx: The stock gained over 5% following higher-than-expected fiscal first-quarter earnings results. With adjusted earnings reaching $4.55 per share, surpassing analysts’ expectations of $3.71, FedEx showcased strong performance. However, its revenue of $21.7 billion slightly missed analyst predictions of $21.74 billion.
2. KB Home: Despite better-than-expected third-quarter revenue and earnings results, shares of the homebuilding company declined by 2% in extended trading hours. KB Home reported earnings of $1.80 per share and revenue of $1.59 billion, outperforming analysts’ estimates of $1.43 per share and $1.47 billion in revenue.
3. Klaviyo: The marketing automation company experienced a slight decline of 1% after its stock market debut earlier in the day. Klaviyo’s shares opened at $36.75 on the New York Stock Exchange, above the offering price of $30 per share.
Stock futures open little changed
On Wednesday evening, futures showed minimal movement. Major indexes were trading mostly flat after hours, indicating a stable market outlook.
In conclusion, despite ongoing economic uncertainties, investor sentiments surround Treasury bonds and stocks have diverged. While DoubleLine’s Gundlach deems Treasurys attractive in the short term, warning signs remain. Market experts foresee potential choppiness as the Federal Reserve’s rate hike looms and companies’ post-market performances showcase mixed results.
Disclaimer: The opinions expressed in this article are solely those of the author and should not be considered financial advice.