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‘Bond King’ Jeffery Gundlach predicts the dollar will dive — which means these 3 assets could shine

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‘Bond King’ Jeffery Gundlach predicts the dollar will dive — which means these 3 assets could shine

Expectations of a more hawkish Fed have strengthened the U.S. dollar — but according to one billionaire investor, the greenback’s future won’t be full of sunshine and rainbows.

“My long-term view on the dollar remains strongly bearish,” DoubleLine Capital founder Jeffrey Gundlach says in his company’s latest webcast.

“We’re looking at a weaker dollar in the second half of next year, maybe 2023. The dollar is going to go down, thanks to the twin-deficit problem [fiscal debt and trade balance] in the U.S. It’s going to slip pretty mightily.”

The “Bond King” adds that a weaker U.S. dollar could lead to the rise of several assets. Here’s a look at three of them — plus a more exotic asset in Gundlach’s collection.

Gold

Stack of gold bars, Financial concepts

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Gundlach says this quintessential safe haven has been “shockingly stable” when compared to the inflation-fueled rally in other commodities.

Moreover, he predicts the downfall of the U.S. dollar could make the precious metal shine again.

“The dollar being firm this year has been a cap on gold, but when it heads down, gold will go up,” says the Bond King.

And because gold can’t be printed out of thin air like fiat money, it can also act as a hedge against inflation. Gundlach projects that inflation could rise to 7% in the coming months.

To capitalize on a potential gold price rally, investors can always choose to buy gold bullion itself. But mining stocks can also benefit in such a scenario: Barrick Gold, Newmont and Freeport-McMoRan should provide a good starting point for some research.

Silver

Stack of gold bars, Financial concepts

RHJPhtotoandilustration/Shutterstock

Gold isn’t the only precious metal Gundlach feels has been ignored, calling gold and silver together “the orphans in the commodity market.”

Silver currently trades at around $22.10 per ounce, which is more than 50% below its all-time high.

Like gold, silver can be a store of value. But it’s also more than a safe haven asset.

The highly conductive metal is widely used in the production of solar panels and is a critical component in many vehicles’ electrical control units. The industrial demand — plus the hedging properties — make silver a very interesting asset class for investors.

You can buy silver coins and bars at your local bullion shop. Meanwhile, companies like Pan American Silver, Wheaton Precious Metals and First Majestic Silver have the potential to outperform in a rising silver price environment.

Emerging market equities

Globe sphere orb model effigy. (vintage style)

Aris-Tect Group / Shutterstock

The U.S. stock market has performed extremely well, with the S&P 500 more than doubling over the past five years.

But Gundlach suggests looking internationally.

“When the dollar starts to go down, you’re going to see tremendous outperformance by non-U.S. stocks. Emerging markets will be a very strong performer when that happens,” he says.

He even notes that after the dot-com bust, the outperformance of U.S. equities in the middle of the 1990s “was completely reversed” and the situation “could very well happen again.”

You don’t need to travel to a foreign country to add international exposure to your portfolio. Exchange-traded funds (ETFs) such as Vanguard FTSE Emerging Markets ETF (VWO) and iShares Core MSCI Emerging Markets ETF (IEMG) provide a convenient way for American investors to diversify.

Fine art

Gundlach is a noted collector of modern and contemporary art, with pieces by Andy Warhol and other famous names gracing his collection.

While he didn’t highlight art investing during his recent comments on the dollar, fine art is becoming a popular way to diversify because it’s a real asset with little correlation to the stock market.

Contemporary artwork has outperformed the S&P 500 by 174% over the past 25 years, according to the Citi Global Art Market chart.

And on a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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Teladoc Tumbled 38% After Big First-Quarter Loss. Is It Just a Pandemic Play?

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After pandemic drop, Canada’s detention of immigrants rises again By Reuters

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© Reuters. FILE PHOTO: Two closed Canadian border checkpoints are seen after it was announced that the border would close to “non-essential traffic” to combat the spread of novel coronavirus disease (COVID-19) at the U.S.-Canada border crossing at the Thousand Isla

By Anna Mehler Paperny

TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.

Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.

Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.

The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.

A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.

A lawyer told Reuters her detained clients have been in Canada for years.

In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.

The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.

Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.

The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.

FEW NO-SHOWS AS DETENTIONS DROPPED

Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.

The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.

No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.

Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.

“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.

He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.

Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.

“Their position is that COVID is not a factor that should weigh in favor of release,” she said.

“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”

The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.

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Nasdaq futures rise as market attempts comeback from April sell-off, Meta shares soar

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Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”

The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.

Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

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