Founder Mark Zuckerberg‘s apology before Congress came off as insincere, Gundlach added, and the company’s fortunes are changing.
Supporters, he said, argue that “regulation outprices competition,” but Gundlach said “equity bubbles pop by regulation.”
The pair trade of energy exploration and technology seems incongruous, but such efforts have paid off before.
Looking at the diversion between prices in the XOP exchange-traded fund and Facebook, Gundlach said the technical formation “is a thing of beauty” and the trade “could really, really perform.” XOP is trading above its 200-day moving average, while Facebook has stayed below the key longer-term level.
News of the play did not have much market effect, with both little changed though off their highs of the day.
Gundlach has been on a strong run lately, correctly predicting the rise in long-term government bond yields and forecasting that commodities would be strong in 2018.
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