gundlach just did. the trade probably does make -- being long eem on its own probably makes sense. >> the passive investment that he laid out there is a important thesis. it's where is the money coming from. it is institutional money, retail money. right now, it's been for a long time retail money flying into this market. he's a hundred percent right when you look at the valuation of the stocks. especially the s&p 500 near the etfs. their valuations are sky high. >> it goes both ways, though. >> it does. >> it can also drag down valuations unfairly as we've seen. for instance, right after the hillary clinton -- >> i tell you what, if you're an investor looking for a hedge, it's never been a better time to use etfs and index funds as hedges. as a hedge fund manager, investors used to give us a hard time saying we are hedging with spies. it was always taboo to talk about this. when these trades weren't so crowded, it probably was, we called it like -- it was basically a sleep at night hedge. it didn't mea

down 0.2%. >>> jeff gundlach is out with a market warning after yesterday's close.dlach telling clients to get r ready for a summer interest rate correction. >> nobody sees a change in policy today, but will they suggest the first quarter data that is soft is temporary. >> absolutely. i think it's fascinating that stepping back from this, how little focus there is on the fed meeting today relative to corporate earnings which is a change from the haven't couple of months and quarters. >> just to get you up to speed, the fed policy decision will be out at 2:00 eastern time. that's the statement no news conference, but live coverage on cnbc. a trio of economic reports today. the adp employment report at 8:15 eastern, followed by services pmi and ism manufacturing. before the bell, time warner and yum brands and volkswagen. after the close, facebook, tesla, aig and fitbit will report. result also focus on nasdaq and facebook and tesla. >> since there is no yellen at that time -- >> we'll go to the bar and the french debate. >> mike santoli gave the french bar to me. may

. >> taking a more bearish view of banking, jeffrey gundlach is betting against further gains in the stock market. gundlach told cnbc he thinks emerging markets offer more opportunity. >> it's the valuation of emerging markets is half the valuation of the s&p 500 when you look at price to sales, price to book, dr. shiller's cape ratio. i think part of that valuation difference has been based upon, one, the dollar had been strong from 2011 until 2015. usually correlates with em under-performance. that's part of it. the rest is that i think passive investing is something -- to use a word i don't like, bubble, where people greatly overbelieve this idea passive outperforms. >>> don't miss cnbc's interview with goldman sachs chairman lloyd blankfein today at 20:15. >>> before we wrap things up for this side of the show, a quick look at european equity markets. seeing modest buying across the board. the xetra dax up by 0.25%. similar gains for the cac 40 trading near a nine-year high after losing roughly 1% in yesterday's trading session. so the macron rally that many expected for yesterda

. >> double line capital ceo jeff gundlach offering a bearish call yesterday at the sohn conference.e spoke to cnbc exclusively about the call. >> the valuation of emerging markets is half the valuation of the s&p 500. when you look at things like price to sales, price to book. doctor shiller's cape ratio. i think part of that valuation difference has been based upon, one, the dollar had been strong from 2011 until 2015. usually correlates with em under-performance. that's part of it. the rest is that i think passive investing is something -- to use a word i don't like, bubble, where people greatly over believe this idea passive outperforms. there's a birth right to outperform all active manager. there's incredible cyclicality. it has been similar to how long they've lasted historically. >> jeff gundlach an active fund manager saying maybe indexing has gone far. it's an interesting call, not a doomsday call, because if you thought everything was going to fall apart, you wouldn't say own emerging markets. it's a valuation spread between those two regions. >> he accurately called for t

gundlach. but the story really is that the market has changed in terms of positioning.u're looking at futures, coming into the year, huge short, now a marginal long. what do you make of how the market is set up in treasuries? oksana: the market is still massively long, this kind of risk generally. long, traditional, interest rate-driven fixed-income risk. let's get that very clear. any amount of open short intere o there that fluctuates is meaningful and important to follow. generally, if you look at individual portfolios, institutional portfolios, and think about the risk parity funds, there are volatility driven. think about the amount of leverage they are probably amassing. they are probably at or about max leverage and any kind of high frequency trading portfolio is probably low. it is a massively long trade. i think talking about investors being short is way too premature until we actually see rates move up and see how portfolios react. jonathan: greg davis, you are in a privileged position to see the flows coming across the desk. as you look at fixed income, talk

jeff gundlach asking the igs,tion, when this chart z should use that?o you have to go the other way to think about where the positioning is? >> it does not change the fundamentals of the trade so you are talking about 10 to 20 basis points. at the end of the day, the longer-term trends are in place that i think serve as a range bound type of existence for 10 year yields. jonathan: what do you make of that, the consensus has often been wrong in the treasury market over the last couple of years. will it continue to be so? brian: probably. i think the market will be relatively calm for the balance of the year. the market has a funny way of surprising us. jonathan: i ask this question on almost every show every -- every show. have we seen the low? i am going to ask you the other way, have we seen the high on the 10 year yield this year? bonnie: with respect to the low, that is not something we can answer is there are still a lot of geopolitical risks that could push is below 2.16 so i think something as asset managers, we should not try to protect. whether

jeff gundlach asking the question, when this chart zigs, should you zag?ause when this was aggressively short treasuries, it was time to go long treasuries, and now the positioning has changed. do you have to go the other way to think about where the positioning is? >> on balance, you need to think about positioning, but it does not change the fundamentals of the trade, so you are talking about 10 to 20 basis points. that is real money, don't get me wrong. but at the end of the day, the longer-term trends are in place that i think serve as a range bound type of existence for 10 year yields. jonathan: what do you make of that, the consensus reflected in the speculative positions has often been wrong in the treasury market over the last couple of years. will it continue to be so? >> yeah, i mean probably. right now, i think the market will be relatively calm for the balance of the year, as to the other guests, but the market has a funny way of surprising us. jonathan: i ask this question on almost every show. have we seen the low? the 10 year yield low? the

liz: i get that but let me bring up double lines jeff gundlach, he says the vix is insanely low.ow. now should be the time for investors to purchase it in the form of put options? >> i think for a very large institutional investor like he is, that is an appropriate approach to the market. i do not think, because we can't do it in a way that is cost effective, that it is really appropriate for the average investor. liz: here is what may surprise our viewers, you own snap. >> yes i do. liz: you want to buy more? it is crashing today. >> i do. liz: why? >> we took it on the chin today for sure. i like snap because i think it's a story that is really yet to be told. i believe in the leadership there. i think that, i think that what we will see is an evolution of a company that will grow in the very same way that facebook did, not in the way that everyone expects. but they have a user cohort that is huge. that millenial generation, bigger than boomers, much bigger than my generation, they live in that, they live in that universe, live in the snap biosphere. to these folks, what some o

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gundlach expected gold also to move higher in the coming months. the market was supposed to go down 78,000 points in trump won, too. wasn't that part of his -- i don't know. maybe not. >> bit of news out of europe. brussels reportedly raised the brexit divorce bill, it now costs about 100 billion euros. eu leaders revised calculations and are demanding more money from the uk to leave the european union and cover up-front liabilities. britain's brexit minister, david davis, saying it's not for eu negotiators to decide how they split that bill and how it will work. >> just give them the bill and say here you go? >> i guess. isn't there a judge or a jury or something? something somewhere? >> based in brussels? >> think are the judge and jury. >> when we come back, an early read on jobs. we'll get linkedin's monthly work force ro force report. >>> stick around "squawk box" will be right back. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, fr

participating in the 22nd annual investment conference in new york city along with bill ackman, einhorn, gundlachlus more you see there on the screen. that is one of our certain highlights of the year. speaking of bill ackman, perschman began trading today on the stock exchange in london. >> now it's open for trade to go british investors. they can now own a piece of pershing square holdings. that's the publicly traded fund run by hedge fund manager bill ackman. it has been listed on the euro neck amsterdam since 2014. this fund in london is a second listing. so why list on the london stock exchange? well, ackman said in a presentation to european shareholders last month that the british market has a deeper pool of investors and he hopes that demand will narrow the difference between where the stock trades and the net asset value of pershing square's investment. to capture the popularity of index investing and in conjunction with the second listing, pershing square is about $4.7 billion. the firm manages will $11 billion total. half the amount of what it managed two years ago. pershing square suf

gundlach says when markets outperform the s&p 500, so, too, does active management.e's advising investors to go long emerging markets and short the s&p. leverage that one time. >> from smart money at sohn to tiger 21 the shift into real estate. the founder of tiger 21 to discuss the move and some of the top picks in the market. michael, good to have you back. >> thank you. >> what is tiger 21? it's not exactly a fund. more like an investment club. >> high net worth creators, 520 people managing $50 billion of individual assets. generally entrepreneurs across north america who have created great businesses and when they sell it. a peer to peer learning network. >> so the lead said there has been a significant move in asset composition into real estate. in my notes it looks like the move is two percentage points, a quarter up to 32%. >> cumulatively it has been king and keeps getting stronger. never been above 30% before. at the same time fixed income has gone into single digits for the first time, historically around 15% now down to 9%. hedge funds all time low. all t

. >> chris tea he intinchristina, of jeff gundlach? >> i understand his perspective. i would say what makes stocks more vulnerable than a rate hike would be news leaked about balance sheet normalization. i think that really is going to be critical. understanding what the fed's plan is for that because, arguably, qe had a bigger impact on stocks than it had on bonds. and so the unwind of had, we're in uncharted territory, could be more impactful for stocks and bonds and make them more vulnerable. >> do you think so, too? >> i think the fed will do everything it can to make sure the qt, the quantitative tightening we might get later this year, will be so well telegraphed and so slowly they're going to do everything they can to make sure it doesn't happen that way, that stocks can look through. >> at the same time it's interesting because we had the reaction, a violent reaction in the markets of a taper tantrum. we are hearing about balance sheet normalization and the market is barely sneezing. we have a vix sitting at ten-year lows right now. we have bond yields -- it's

worldff gundlach's of the , is that where you are as well? where are we, 2.41?ening my twitter account, but our view is we saw the market, head the big selloff, a big retracement come and now we are around the 2.40 level. is still notmarket pricing in the fed wanting to tighten financial conditions. the market is pricing in one a year, 25 basis points for the next few years. we think it is 3-4. those at up. that is not priced into the market. that intermediate part of the curve, the five-year treasury rather than the long in, investors who are going out to get some yield are going to be disappointed. jonathan: are we still lower on the 10 year? i will say yes. i think the 10 year, a three handle for sure. three 23.5%. the market will say commit maybe it keeps going. a three handle, unless our forecast hasn't changed material, that is not a bad place. thank you so much for being here. coming out, the man who wrote a biography of steve jobs here to talk about apple and the tech sector. with today, an interview bloomberg news columnist and former omb director. live

it sounds acute agree with dundl -- gundlach. where are the biggest opportunities?even: i would start by looking at asked income. when local sovereign bonds have an average yield of 7% and they are different cases of logan high yields, and you compare that, put germany, japan and switzerland together and for 10 years, the yield is nearly zero and there may be some currency risks. plenty of people had to but it is not worth doing for zero. you can see relative value in em fixed-income rather than relative markets area if we look at -- market street if you look at equities, you see, particularly against the united states, emerging markets of had a hard time. they have had a lousy six years. i think that will lead to longer term returns being better in emerging markets, to clearly the areas with exchange rates -- particularly the areas with exchange rates that are depressed. david: how do you account for the risk on fx? steven: it is important to diversify global investment and take fx risk outside of the u.s. dollar. bull have been three big markets and they have dist

gundlach createded an account at twitter, and he has already over 1,000 followers. >> what would youay the big takeaway? what was everyone buzzing around in the hallways about afterwards? >> people were surprised by the number of tech picks and tech long picks that there were. you look at the s&p 500, the nasdaq, just consistently going higher. you have these smart hedge fund managers who say here are specific opportunities that we think can still go higher from here. >> all right. we'll have chamath on in a bit. he was on yesterday in the afternoon. >> closing bell. >> asked about -- we always talk about ibm. he was asked about watson. he laughed and said watson is a joke. we talked about how there are people in the valley who think watson is like an "if then" program and a great marketing effort of our time. we'll have a conversation about that. >> i like -- i'm not worried about him being ineffectual, i'm worried about him being manevolent. >> you are talking about it like it's a he. >> it's watson. i think it's a he. >> it's an it. >> if i'm traveling somewhere, and they got me a