Commentary on ThinkAdvisor article by Janet Levaux
Republican presidential candidate Donald Trump’s victory over Hillary Clinton came as a surprise to most, but DoubleLine CEO Jeffrey Gundlach had predicted it all along, ThinkAdvisor writes.
Looking at Economic Indicators Instead of Polls
As early as February, Gundlach thought Trump had a chance of winning, and by May he said that people “need to prepare for a Trump presidency,” the publication writes.
Trump, according to Gundlach, was able to exploit the same thing that Bill Clinton used to win the election in the 1990s: voters concerns about their finances, ThinkAdvisor writes.
So unlike the pollsters, the “Bond King,” who’s a trained mathematician, based his prediction on economic trends and several other factors, according to the publication.
Gundlach has recently said that the September’s jobs report suggested the likelihood of a recession, ThinkAdvisor writes. Non-farm payrolls data indicated unemployment reaching 5%, crossing the 12-month moving average of 4.9%, according to the publication.
According to DoubleLine analysis of data from the Bureau of Labor Statistics and Automatic Data Processing, the number of jobs being added has been declining since June, ThinkAdvisor writes.
Now that he’s been proven right, Gundlach believes that Trump’s presidency will increase inflationary pressure, he told Reuters, according to the publication. And that’s bad for government bonds, the fixed-income specialist said, according to ThinkAdvisor.