There will be “trouble for equity markets” if the yield on the benchmark 10-year U.S. Treasury note moves beyond 3 percent, Jeffrey Gundlach, chief executive of DoubleLine Capital, warned on Tuesday.
Late Tuesday, the 10-year yield US10YT=RR stood at nearly 2.38 percent.
In his first investor webcast this year, Gundlach said after the recent huge run-up in U.S. stock markets, investors should look to “peel off” their exposure to equities.
Gundlach, known on Wall Street as the ‘Bond King’, reiterated an investment call he made in late 2016, saying he expects markets to reverse their post-election moves.
He told Reuters in December that the strong U.S. stock market rally, surge in Treasury yields and strength in the U.S. dollar .DXY since Donald Trump’s surprising Nov. 8 presidential victory look to be “losing steam.”