1-13-15 Market Outlook v.pdf

8/10/2019 1-13-15 Market Outlook v.pdf

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LiveWebcasthostedby:

JeffreyGundlach

ChiefExecutiveOfficer

January13,2015

2015Market

Outlook

V


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TABI

BloodlessVerdict

of

the

Market


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3

ChangeinGlobal10yearBondYieldsin2014

Source:Bloomberg;Doubleline

Bps=basispoints.Pleaseseeindexdefinitionsintheappendix.Youcannotinvestdirectlyinanindex.

254

239226224184183173167

151150139127113

97 97 86 60 47

28 21 3

6

261

585

300

200

100

0

100

200

300

400

500

600

700

ChangeinGlobal10yBondfor2014(BPS)


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YieldCurvesFlattenedAcrosstheGlobein2014

Pleaseseeindexdefinitionsintheappendix.Youcannotinvestdirectlyinanindex.


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Equity2014PerformanceTotalReturnUSDAsof12/31/14

Source:Bloomberg;DoubleLine

Pleaseseeindexdefinitionsintheappendix.Youcannotinvestdirectlyinanindex.

13.7%

10.0%

14.8%

4.9%

7.9%9.6%

5.0%

10.0%

0.5%

9.3%

4.8%

1.2%

4.2%

8.3%

5.3%

2.6%

15%

10%

5%

0%

5%

10%

15%

20%

DevelopedMarkets

Equity

Performance

By

Index

(2014TotalReturnUSD)

9.4% 13.4%

21.3%

9.9%

44.7%

21.2%

54.0%

4.9%

30.4%

4.4%

8.7%

19.1% 22.9% 24.5%

14.5% 13.2%

42.1%

25.7%

18.9%

0.4%

60%

40%

20%

0%

20%

40%

60%

EmergingMarketsEquityPerformanceByCountry(2014TotalReturnUSD)


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FX:DXYvs.TradeWeightedUSDPerformance(3yrs)December31,2011throughJanuary7,2015

Source:Bloomberg;

Doubleline

FX=Foreignexchangerate.DXY=USdollarindexindicatingthegeneralinternationalvalueoftheUSdollar.ItdoesthisbyaveragingtheexchangeratesbetweentheUSDandmajorworld

currencies.


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1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

75

80

85

90

95

10YUSTYield

JPM

organEmergingMarkets

CurrencyIndex(Inverted)$Pirce

EmergingMarketCurrenciesand10YUSTYield

JPMEMFX

10YUST(RHS)

Periodofnegativecorrelation

FX:LowerYieldsnowNegativeforEmergingMarkets

DeflationarySlowdowninGlobalGrowth

December31,

2012

through

December

31,

2014

EMFX

weaker


FX=Foreign

exchange

rate.

10Y

UST

=10

year

US

Treasury

note

yields.

JPM

EM

FX

=atradable

benchmark

for

Emerging

Markets

currency

markets.

The

index

comprises

of

10

liquid

currencies

acrossthreeequallyweightedregions,LatinAmerica,AsiaandCEEMEAversustheUSdollar.Correlation=Whensecuritiesmoveinasimilardirection.Correlationrangesbetween+1and1.

Omeannocorrelation,1meansperfectcorrelationand1meansnocorrelation.

Aninvestmentcannotbemadedirectlyinanindex.


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FX:GlobalSelectedCurrenciesPerformance

2014TotalReturn

Asof

12/31/14

Source:Bloomberg

JPY=JapaneseYen,CNY=ChinaYuanRenminbi,HKD=HongKongDollar,IDR=IndonesianRupiah,SGD=SingaporeDollar,PEN=PeruvianNuevoSol,CHF=SwissFranc,INR= IndianRupee,GBP=

GrainBritan Pound,ILS=Isreali NewSheqel,NZD=NewZealandDollar,Eur =Euro,SEK=SwedishKrona,TWD=TaiwanDollar,AUD=Austrianlian Dollar,MYR=MalaysianRinggit,CZK=CzechKoruna,

BRL=Brazilian

Lira,

KRW=

Korean

Won,

NOK

=Norwegian

Krone,

MXN

=Mexican

Peso,

PLN

=Polish

Zloty,

CAD

=Canadian

Dollar,

COP =

Columbian

Peso,

TRY

=Turkish

Lira,

CLP

=Chilean

Peso,

ZAR

=SouthAfricanRand,HUF=HungarianForint,RUB=RussianRuble.

FX=ForeignExchange

Aninvestmentcannotbemadeinandindex.

%totalreturn

7.0

9%

6.3

5%

1.6

2%

0.3

1%

0.42

%

1.12%

1.6

5%

1.8

2%

2.2

8%

2.9

4%

3.9

1%

4.3

6%

5.0

4%

5.4

2%

5.7

2%

7.4

5%

9.1

5%

9.9

5%

10.2

2%

10.4

7%

11.8

3%

12.0

6%

12.6

0%

12.9

4%

15.7

9%

15.8

5%

1

7.0

7%

17

.21%

40.3

3%

50%

40%

30%

20%

10%

0%

10%

INR

IDR

TRY

HKD

CNY

BRL

NZD

KRW

PEN

MYR

ZAR

SGD

TWD

GBP

AUD

CAD

MXN

CLP

CHF

ILS

EUR

JPY

PLN

CZK

HUF

COP

SEK

NOK

RUB

ExpandedMajorCurrenciesPerformance


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BondandEquityMutualFundFlowsJanuary1,2007throughDecember31,2014


300,000

200,000

100,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2007 2008 2009 2010 2011 2012 2013 2014

Cumulativenetinflowsbyyear($millions)

BondandEquityMutualFundFlows

Equitymutualfunds

Bondmutual

funds


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CommoditiesPerformanceDecember31,2013throughJanuary8,2015


YTD=YeartoDate.DJ=DowJonesindices.Pleaseseeappendixfordefinitions.Youcannotinvestdirectlyinanindex.

Gold

Energy

Metals

GrainsCommodity

Silver


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CommodityIndex(CRB)vs.CommodityFuturesIndexJanuary14,2005throughJanuary8,2015


CRBCMDT

Index

=The

spot

market

price

index

is

ameasure

of

price

movements

of

22

sensitive

basic

commodities

whose

markets

are presumed

to

be

among

the

first

to

be

influenced

by

changes

in

economicconditions.BCOM=BloombergCommodityIndexiscalculatedonanexcessreturnbasisandreflectscommodityfuturespricemovements.Rebalancesannuallyweighted2/3bytradingvolume

and1/3byworldproduction.Youcannotinvestdirectlyinanindex.


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GoldinFX 1yearreturnsJanuary9,2014throughJanuary12,2015


INR=Indian

Rupee

spot

price,

AUD

=Australian

dollar

spot

price,

CAD

=Canadian

dollar

spot

price,

ZAR

=South

African

Rand spot

price,

RUB

=Russian

Ruble

spot

price,

JPY

=Japanese

yen

spot

price

Youcannotinvestdirectlyinanindex.


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Source:Bloomberg

DUST=Direxion dailygoldminersbear3xsharesinanexchangetradedfundincorporatedintheUSAwiththeobjectiveofdailyinvestmentresultsof300%theinverse(oppositeoftheNYSEArca Gold

Minersindex.

GDX

=Market

vectors

gold

miners

ETF

is

an

exchange

traded

fund

incorporated

in

USA

that

tracks

the

performance

of

the

Arca Gold

Miners

Index.

GLD=

SPDR

gold

shares

in

and

investmentfundincorporatedintheUSAwiththeobjectiveisforsharestoreflecttheperformanceofthepriceofgoldbullion.


GoldMinersETFComparisonFortheYear2014


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Source:Bloomberg

XBTBGNCurncy =Bitcoinspotprice.Bitcoinisavirtualcurrencythatismathbaseddigitalassetsinwhichtransactionscanbeperformedcryptographicallywithouttheneedforacentral

issuingauthority.

BitcoinJanuary3,2013throughJanuary5,2015


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FX:USDRealEffectiveExchangeRate

June30,1982throughDecember31,2014

Source:Bloomberg

CEERUS=BOECalculatedeffectiveexchangeratesUSprovidedbytheBankofEngland.Aneffectiveexchangerateisameasureofthevalueofacurrencyagainstabasketofothercurrencies,relativeto

abase

date.

FX

=foreign

exchange.



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TABII

BullCase


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20Source:DeutscheBankGlobalMarketsResearch,January2015

LaborMarket LessSlackJanuary1,2001throughDecember31,2014


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21Source:DeutscheBankGlobalMarketsResearch,January2015

UnemploymentRateJanuary1,2008throughDecember31,2014


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22Source:NFIB,Haver Analytics,DeutscheBankGlobalMarketsResearch,January2015

Sales&LaborJanuary1,2003throughDecember31,2014


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23Source:SocialSecurityAdministration,Haver Analytics,DeutscheBankGlobalMarketsResearch,January2015

DisabilityRecipientsintheU.S.January1,2003throughDecember31,2014


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24

Source:Bloomberg

FDSPNUMIndex=SupplementalNutritionAssistanceProgramparticipationinmillions.


FoodStampUsageOctober31,2005throughSeptember30,2014


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Source:Deutsche

Bank

Research,

January

2015,

EIA,

OECD,

Haver Analytics.

Note:

Right

side

scale

is

inverted.

Grey

shaded

area

indicated

U.S.

recession.

G7=SevenindustrializedeconomiesincludeFrance,Germany,Italy,Japan,UnitedStates,UnitedKingdomandCanada.YoY =yearoveryear.GDP=theamountofgoodsandservices

producedwithinagivencountry.

DevelopedCountriesGrowthvs.OilPricesJanuary1,1990throughJanuary4,2015

G7GDP

OilPrices(Scaleinverted)


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Source:Bloomberg

SPX=S&P500Index.Fordefinition,pleaseseeappendix.MSCIACWIIndex=globalfreefloatindexofemerginganddeveloped worldequitymarkets.


S&P500Index/AllCountryWorldLarge&MidCap

EquityIndexJanuary1,2010throughJanuary7,2015


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Cyclicalvs.DefensivePerformanceMonitorJanuary7,2000throughJanuary7,2015

Note:SubsetsoftheS&P500index.Cyclicals=energy,materials, industrials,consumerdiscretionary,Informationtechnology; Defensives=healthcare,consumerstaples,telecoms,utilities.

Standarddeviationsarebasedon10yhistoricallookback.Standarddeviation=Measuresthedispersioninagivensetofdata.Itscalculatedasthesquarerootofvariance.

Youcannot

invest

directly

in

an

index.

80

90

100

110

120

130

140

150

160

170

180

C

umulativePerformanceLongCyclicalsShortDefensives(Indexedto

8/19/94)

Cyclicalvs.DefensiveBasket*basedon10ystatistics

Cyclicalvs.Defensive

"Simple10yrMov.Avg.

1StDev

2StDev


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TABIII

BearCase


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Since1871,USEquitiesHaveNeverRisen7

ConsecutiveYearsinaRow

June30,

1874

through

December

31,

2014

Source:Robert

Shiller,

Yale

University

http://www.econ.yale.edu/~shiller/

S&P500indexdefinitioncanbefoundintheappendix.



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Source:dshort.com,

Advisor

Perspectives

http://www.advisorperspectives.com/dshort/charts/markets/nyse

margin

debt.html?NYSE

margin

debt

SPX

growth

since

1995.gif

Realinflationadjusteddata.S&P500Indexdefinitioncanbefoundintheappendix.Youcannotinvestdirectlyinanindex.

MarginDebtHigherNowthan2007January1,1995throughDecember14,2014


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Source:Thechartstore.com

S&P500indexdefinitioncanbefoundintheappendix.QE=Quantitativeeasing.Youcannotinvestdirectlyinanindex.

S&P500Indexvs.FederalReserveTotalAssetsDecember26,2008throughDecember19,2014

12/19/14


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TABIV

Forecasts


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1.9

2.1

2.3

2.5

2.7

2.9

3.1

3.3

3.5

3.7

BloombergMedianEconomistForecastforYearEnd2014andActual10yUSTYields

10yUSTreasuryYieldForecastforYearEnd2014July11,2013throughJanuary7,2015

Notes:

Median

economist

forecasts

for

2015

is

based

on

Bloomberg

survey

data

as

of

12/11/14.


UST=USTreasury

2.17%

1.97%

MedianEconomistForecast2014

10yUSTYield

MedianEconomistForecast2015

3.01%


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BondYieldForecast(US,Germany,andUK)AsofJanuary7,2015

Source:

BloombergG7=France,Germany,Italy,Japan,US,UKandCanada


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Crude Oil Futures vs. Forecasts

Source:Bloomberg

WTI=WesternTexasintermediate.Agradeoflight,sweetcrudeoil.


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USCPIandWTIJanuary7,2005throughJanuary7,2015

100

50

0

50

100

150

3

2

1

0

1

2

3

4

5

6

1/7/2005 1/7/2006 1/7/2007 1/7/2008 1/7/2009 1/7/2010 1/7/2011 1/7/2012 1/7/2013 1/7/2014 1/7/2015

WTIYoY%

CPIYoY%

USCPIandWTI

USCPI

WTIYOY%(RHS)

Source:Doubleline;Bloomberg

CPI=ConsumerPriceIndex.WTI=WestTexasintermediateCrudeoil.YoY =yearoveryear.RHS=righthandside.



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OfficialUSCPIandPriceStats (%YoY)January1,2010throughJanuary4,2015

YoY =Yearoveryear.CPI=ConsumerPriceindex.Youcannotinvestdirectlyinanindex.


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USBreakevensSeptember30,2011throughJanuary7,2015

Note:Breakevens demonstrates

predicted

inflation

for

aperiod

of

time

by

comparing

TIPS

to

regular

US

treasury

securities.

The

yields

on

bonds

have

dropped

more

than

TIPS

implying

that

inflationwouldbelowerinthefuture.Youcannotinvestdirectlyinanindex.


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US,German,French,andItalian10YearBreakevensJanuary11,2010throughJanuary11,2015

Source:Bloomberg

Note:Breakevens demonstratespredictedinflationforaperiodoftimebycomparingTIPStoregularUStreasurysecurities.TheyieldsonbondshavedroppedmorethanTIPSimplyingthat

inflationwouldbelowerinthefuture.DEGGBE10Index=German10yearbreakevenindex.FRGGBE10Index=French10yearbreakevenindex.GILGBE10Index=Italian10yearbreakeven

index.USGGBE10Index=US10yearbreakevenindex.Youcannotinvestdirectlyinanindex.


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USDollarandInflationJanuary31,2005throughJanuary6,2015

Source:Bloomberg

DXYCurncy=USDollarspotprice.CPI=ConsumerPriceIndex.Youcannotinvestdirectlyinanindex.


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TABVInterest

Rate

Trends


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US2yearTreasuryvs.German2yearTreasuryJanuary8,2010throughJanuary12,2015

Source:Bloomberg

GT2=US2yearTreasury.GTDEM2Y=German2yeartreasuryindex.Youcannotinvestdirectlyinanindex.


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US,Germany&Japan5yearBondYields

Source:Bloomberg

GT5

=

US

Government

generic

5

year

Treasury.

GTJPY5

=

Japanese

5

year

Treasury.

GTDEM5

=

German

5

year

Treasury.

You

cannot

invest

directly

in

an

index.


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US,German,JapaneseandSwiss10YearYields

Source:Bloomberg

GT10

=

US

Government

generic

10

year

Treasury.

GTJPY10

=

Japanese

10

year

Treasury.

GTDEM10

=

German

10

year

Treasury.

GTCHF10Y =

Swiss

10

year

Treasury.

You

cannotinvestdirectlyinanindex.

2 i ld


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Eurozone2YearYieldsOctober1,2013throughJanuary7,2015

Source:Bloomberg,DoubleLine

Germany,

France,

Italy,

Spain

and

Irelands

2

year

Treasury

yields..

You

cannot

invest

directly

in

an

index.


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Greece10YearYieldsBreakingDownwardTrend

Source:Bloomberg


GreekYields(%)

Itlaian&SpanishYields

(%)

G k 10 Y Yi ld G ld S t


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Greek10YearYieldvs.GoldSpotJanuary11,2010throughJanuary8,2015

Source:Bloomberg

GGGB10YR=Greek10yearTreasuryIndex.Youcannotinvestdirectlyinanindex.

Central Bank Policy Rates


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CentralBankPolicyRatesJanuary1,2004throughDecember31,2014

Source:Deutche Bank

Research,

January

2015.

EurozoneconsistsofAustria,Belguim,Cyprus,Estonia,Finland,France,Germany,Greece,Ireland,Itlay,Latvia,Lithuania,Luxembourg,Malta,theNetherlands,Portugal,Slovakia,Slovenia,

andSpain.


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OilPricesRequiredtoBalanceBudget


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Source:Wall

Street

Journal

http://www.wsj.com/articles/oil

price

slump

strains

budgets

of

some

opec

members

1412952367

q gAsofOctober10,2014

Oil(WTI)vs.HighYieldvs.Inverse10YearUSTYield


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vs.S&P500

January

13,

2012

through

January

12,

2015

Source:Bloomberg

CL1COMBComdty =WestTexasIntermediate(WTI)isalight,sweetcrudeoilfuturescontract.SPXT=S&PP500Index.SBCXPCAPIndex=Citigroup HighYieldCashPayCappedIndex.

USGG10YrIndex

=

Generic10

year

US

Treasury.

You

cannot

invest

directly

in

an

index.

Oil (WTI) vs Natural Gas


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Oil(WTI)vs.NaturalGasJanuary13,2005throughJanuary12,2015

Source:Bloomberg

CL1COMBComdty =WestTexasIntermediate(WTI)isalight,sweetcrudeoilfuturescontract.NG1Comdty =GenericNaturalgasfuturescontract.Youcannotinvestdirectlyinanindex.

USShaleBreakevenPoints


54/72

53Source:

US

Global

Investors,

Everyone

Loves

aDiscount

But

Wheres

the

Support

for

Oil

Prices?,

November

7,

2014

http://www.usfunds.com/investorlibrary/investoralert/?pageNum=9&nextNID=BF9D8F35AF2A838E891B004B005607A1#.VK7DyfJmyUk

AsofOctober10,2014

EnergySectorWeightingAcrossCreditand


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54

gy g g

EquityIndicesAs

of

November

25,

2014

Pleaseseeappendixfordefinitions.


USOil&GasProducersHaveNotReliedHeavilyon

B k L


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BankLoans

December

31,

2000

through

September

30,

2014

Source:Gavekal Data/Macrobond


OnlySmallShareofCapexGoestoEnergySector


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January1,1960throughDecember31,2014

Source:DeutscheBankResearch,January2015

Capex=capitalexpenditure.Youcannotinvestdirectlyinanindex.

HYEnergyandMetalsRemainUnderPressure


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December31,2013throughJanuary6,2015

300

400

500

600

700

800

900

GO

VTOAS

HYSpreads

HY

HYEnergy

Source:Bloomberg,DoubleLine

HY=HighYield,HYEnergy=Theenergysectorofthehighyieldmarket.



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TAB

VII

ClosingThoughts

China HomePricesareFallingJ 1 2010 th h D b 31 2014


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WhenCouldDefaultFearsBecomeanIssue?As of December 1 2014


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AsofDecember1,2014

Source:CitigroupResearch,December1,2014

HY=High

Yield.

You

cannot

invest

directly

in

an

index.

Years

RetailSalesvs.OnlineSalesJanuary 1 1995 through December 31 2014


62/72

61



Youcannot

invest

directly

in

an

index.


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2015 Market Outlook V


64/72

LiveWebcasthostedby:

Jeffrey

Gundlach

ChiefExecutiveOfficer

January13,2015

2015MarketOutlook V


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Disclaimer


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NewWebcastFormatfor2015

New

Portal

to

register

for

all

webcasts

at

www.doublelinefunds.com

Similarfundswillbecombinedintoonewebcast

(ex.RisingRates FloatingRateFund,LowDurationandLowDurationEM)

LuzPadilla Tuesday,February10,2015EmergingMarkets


1:15pmPDT/4:15pmEDT

JeffreyGundlach Tuesday,March11,2015TotalReturnBondFund


1:15pm

PDT/4:15

pm

EDT


RisingRateFundsWebcast Tuesday,March24,2015LowDurationBondFund,LowDurationEmergingMarketsFund&FloatingRateFund


1:15pm

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