DoubleLine CEO/CIO Jeffrey Gundlach waxed market poetic in a recent Just Markets webcast. He looked back at 2025 and ahead in 2026 for opportunities with a barrage of charts to support his assertions.
In a nod to the classic board game, Gundlach referenced "Clue" as an apt name for the webcast. In the game, players deduce who the murderer is and what weapon was used.
"The weapon is the deficit-based economy," he said, adding that the Clue reference also alludes to hints as to where the markets may be headed in the new year.
Gundlach also serves as portfolio manager in the DoubleLine Opportunistic Bond ETF (DBND), DoubleLine Shiller CAPE U.S. Equities ETF (CAPE), DoubleLine Mortgage ETF (DMBS), and the DoubleLine Fortune 500 Equal Weight ETF (DFVE). As such, certain topics speak to the positioning of fund holdings in 2026 — some of which carry over from the previous year's focus.
2025 in Review
International asset interest was a highlight of 2025. The debasement trade and other macro factors spurred rapid de-dollarization, and Gundlach foresees that trend persisting. As such, investors witnessed a rise in international asset performance, particularly emerging markets. A notable international performer was emerging market sovereign bonds, which were up 13% for the year.
With the Fed in rate-cutting mode, income will be a demand driver in 2026. One area where opportunity may exist is high yield bonds (particularly corporates), which were up 8.6%.
Of course, 2025 was marked by increasing interest in artificial intelligence (AI), which fed into strength for metals. Copper was one of the beneficiaries, with a 41.1% gain last year as data centers will require more electricity and thus, copper to help build out AI infrastructure.
A year of market uncertainty in tandem with a weaker dollar translated into gains for gold. The precious metal was up 64.4% and more uncertainty in 2026 could give gold more tailwinds.
One area of interest is commercial mortgage-backed securities (CMBS). It's a market niche in fixed income that's offering value-positioned opportunities.
"We've gotten more bullish on CMBS," Gundlach said, noting that the "market could be the top performer in 2026."
Treasury Trove of Yield Data
Gundlach noted the strength of the overall bond market (as seen through the Bloomberg U.S. Aggregate Bond Index or simply the "AGG"). He also noted the increase in Treasury issuance since 2020. The size of the U.S. Treasury market has accelerated beyond others compared to corporate/foreign bonds, agency securities, munis, and open paper market.
Gundlach highlighted the performances of Treasury yields, noting that the benchmark two-year curve has stopped falling. Gundlach maintains that the Fed is in sync with this two-year curve as a guide for interest rate policy.
The fixed income market has been witnessing normalizing yield curves as the Fed instituted three consecutive cuts to end 2025. As such, the five-year, 10-year, and 30-year yield curves are rising. However, as debt relative to gross domestic product (GDP) rises, the confidence in the 30-year performance comes into question.
"You're better off in cash than 30-year Treasuries," Gundlach said, adding that "the two-year Treasury will outperform the 30-year."
Strength of Gold, Commodities
Gundlach reaffirmed his penchant for gold, which is "on a moonshot." He highlighted waning "investor confidence in central bankers" and "inflationary policies" fueling gold gains in 2026.
Central banks continue to purchase gold, as Gundlach noted that the IMF World Reserve Gold Holdings are at $41 billion. Also, the pace of purchasing has gone up despite rising prices. Gold has also outperformed bitcoin over the course of four years, and outpaced the S&P 500 the last five years.
Silver has been rising in conjunction with gold's rally, but Gundlach is not as effusive in his praise for that metal compared to gold. That's due to the market dynamics of silver.
"Silver is always speculative," Gundlach said.
Given the current market environment, Gundlach is positive on broad commodities. The Bloomberg Commodity Index has been going sideways before rising in 2025 thanks to the weakness of the dollar.
In a chart, Gundlach noted that the dollar has been in a downtrend since 1985. From 2010 to now, there's been an upward trendline that may give dollar bulls some solace. However, if it falls below that trend line, accelerating dollar weakness could ensue. That's especially the case if the markets see a new Fed chair this year.
S&P Strength Waning
While the S&P 500 returned 18% in 2025, it doesn't necessarily portend to future strength in 2026. As Gundlach noted in a chart, the S&P 500 Index was in line with other moving averages, but a recent steep rise could signal forthcoming short-term weakness.
Diving deeper into the indexes, the cap-weighted S&P 500 outperformed the equal-weighted iteration, though that trend may reverse in the long-term investment horizon. Also, the S&P growth index was a strong performer versus the value-oriented index — not a surprise here given the strength of large-cap growth names.
Gundlach reiterated the interest in international assets in a chart showing U.S. equity prices versus the rest of the world. There was a strong performance trend for U.S. equities until 2024, but international equities have been outperforming the U.S. since then (including emerging markets). A declining dollar should see that trend persist.
"I think it's time to call it a day on riding the S&P 500," Gundlach said.
Private Credit Bloat and Buffalo Bills
Overall, Gundlach prefers metals, commodities, foreign stocks, local currency EM bonds, real assets (land and gold), high-quality bonds, and cash. But what is he recommending against?
Private credit was an investment theme that emerged to even greater prominence in 2025. However, Gundlach recommends against allocating to private credit as there may be a dearth of opportunities left.
As Gundlach noted, the size of the private credit market has grown to an extent where it's now rivaling the size of the high yield market. Given this exponential expansion, there's now what Gundlach calls "a classic deterioration of opportunity." As he explained, this often occurs in a nascent market where early adopters can exploit inefficiencies. Now, with big players entering the private credit market, there may be bloat as later market entrants flooded the space with new products.
Lastly, with a discussion on dollar bills and T-bills, Gundlach ended the webcast by mentioning the Buffalo Bills as the NFL playoffs are in full swing.
"Let's go Bills," concluded Gundlach, a Buffalo native.
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