Future direction of financial markets

As far as the future direction of the financial markets is concerned, billionaire investor Stanley Druckenmiller is not so sure. After dumping his other investments after Trump’s tweet on May 5, he piled into Treasuries. When he bought them he wasn’t sure if rates were going down but he was sure that they were not going up. He had previously noted that buying two-year Treasury notes (SHY) in late 2000 was one of his best trades ever.

Druckenmiller Suggests These Two Trades to Hedge against Meltdown

Druckenmiller thinks Fed rates are going to zero

As Bloomberg reported, Druckenmiller mentioned that he could see the Fed rates going to zero in the next 18 months if the economy softens further. Since May 5, bond prices have jumped while the yields have slumped. The yield on the ten-year Treasury security (BND) has plummeted ~400 basis points. He said that while Treasuries (TLT) might have become less interesting after their recent rally, they are “the best game in town” if the economy deteriorates. He also likes gold (GLD) in this environment.

Druckenmiller’s gold bet

Druckenmiller dumped his gold (GLD) holdings the night before Trump’s election. However, he could not resist the metal for long and again dipped back into it in December 2016 and January 2017. He had wanted to buy currency, but no country wanted its currency to strengthen, so he bought gold (JNUG) instead, which was attractively priced.

Latest articles

Marathon Petroleum (MPC) stock has been tumbling in Q3, driven by geopolitical tensions, oil price uncertainty, and weaker refining conditions.

This week, AT&T CEO Randall Stephenson noted that AT&T (T) is on track to reduce its leverage multiple to about 2.5x by the end of this year.

Jeff Bezos announced that Amazon had placed an order of 100,000 electric delivery vans from Michigan-based startup Rivian.

Bad news on the trade war front appears to have led to a fall in the broader US equity markets today. Cannabis ETFs were also trading in the red.

Energy Transfer (ET) stock has recovered in the last two trading sessions after investors hammered it on its plans to acquire SemGroup (SEMG).

Software-as-a-service company Datadog (DDOG) made a smashing debut on Wall Street yesterday. After its IPO, DDOG's shares surged 40% in intraday trading.