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Fund Managers Increased Risk but Still Fear Slowdown
Despite the markets hitting record highs, not many fund managers are in an optimistic mood.
Could Gold Be the Best Bet amid Uncertainty?
The overall investor sentiment has been bearish given the US-China trade tensions and deteriorating economic reports. In addition to bonds (BND), investors are also looking to gold due to its safe-haven appeal. Not only this, there are many other factors that are currently going in gold’s favor.
June’s ‘Most Crowded’ Trade Reflects Investors’ Risk-Off Mindset
According to the latest Bank of America Merrill Lynch survey, government bonds are the most crowded trade. It is the first time in the history of BAML that the preference for Treasuries has topped the list. The US government bonds were cited by 27% of the fund managers, topping long tech trade, which came at the second position.
Fund Managers’ Allocations Point to Recessionary Conditions
Bank of America Merrill Lynch conducted a survey that polled 230 global investors with $645 billion in total assets under management between June 7 and June 13. The asset allocation of fund managers implies recessionary conditions.
What Jeffrey Gundlach Has to Say about the Fed’s Next Moves
Jeffrey Gundlach was surprised when the Fed switched to a dovish stance and predicted no hikes this year, and he thinks that change is “not reassuring.”
Where Gundlach Says Investors Should Hide as Recession Knocks
Jeffrey Gundlach believes that weakness is evident in US economic indicators.
What’s Jeffrey Gundlach’s Top Recommendation for 2019?
Jeffrey Gundlach recommended investors take advantage of the volatility in interest rates at the recent Sohn Conference.
Gundlach’s Advice to Investors during 2020 Elections
In terms of bonds (BND) (AGG), Gundlach has time and again mentioned that there is high-grade corporate debt.
Gundlach Predicts What the Next Downturn Will Look Like
Jeffrey Gundlach believes that if the equities do well this year, emerging market equities will do better than US stocks (SPY) (DIA).
Trump Touts Strong Economy after Jobs Report—Asks for a Rate Cut
On April 5, the US jobs report was released, and the data came as a relief to the markets.
US Labor Market Strength Remains Intact despite Wage Slowdown
While job additions in March topped analysts’ estimate of 175,000, coming in at 196,000, wage growth came in below expectations.
Another US Jobs Disappointment Could Fuel Slowdown Fears
In February’s job report, while job additions came in substantially weaker than the economists’ expectations of 180,000 at just 20,000, the wage growth and unemployment rate came in strong.
Recession Risk: Why BMO, JPM, and GS Say ‘This Time It’s Different’
BMO chief economist Tom Porcelli discussed his take on the current yield inversion and the implications for the markets.
Inversion of Yield Curve: Analysts Are Split on Recession Signals
After the yield curve inverted on March 22, market concerns about the global slowdown and a potential recession have multiplied.
Markets Look at US-China Trade Talks as Slowdown Concerns Multiply
Today, another round of trade talks started in Beijing.
Could Falling US Consumer Confidence Mean a Recession Ahead?
The Conference Board updated the US consumer confidence index yesterday. The confidence index hit a 16-month low at 124.1 in March.
Morgan Stanley: ‘Get Defensive’ on Inverted Yield Curve
Morgan Stanley (MS) equity strategist Michael Wilson said that investors should “remain defensively positioned,” as last week’s yield curve inversion was bearish for stock markets (DIA) (IVV).
Could the Yield Curve Inversion Be a Self-Fulfilling Prophecy?
Another factor that added to the downward pressure on yields came after the Fed’s more-dovish-than-expected take on future rate hikes.
Markets Spooked as Yield Curve Inverts for First Time since 2007
The Treasury yield curve turned negative on March 22. The ten-year yield fell below the three-month yield for the first time since 2007.
China’s Slowdown Overtakes Trade War as Biggest Tail Risk
In Bank of America Merrill Lynch’s March 2019 survey, the slowdown in China was cited as the biggest tail risk by the majority of respondents.
Modern Monetary Theory Might Have Takers, but Gundlach Isn’t One
Jeffrey Gundlach is very concerned about the increasing debt in the US economy.
Why Gundlach Still Thinks We’re in a Bear Market
In December, Gundlach said, “I’m pretty sure this is a bear market.” He pointed out that even FAANG stocks—Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL)—were in or near a bear market.
Gundlach: Could US Economic Indicators Be Signaling a Recession?
After being asked about the timing of the next recession during his interview with Yahoo Finance, Jeffrey Gundlach said that while the global stock market (ACWI) peaked on January 26, 2018, US markets (SPY) hung on until October.
Gundlach Has Long Been Warning of a Debt Bomb: Should You Care?
Jeffrey Gundlach has long been warning markets about the risk that excess leverage in the system poses.
Trade War Remains Investors’ Top Concern
In Bank of America Merrill Lynch’s February 2019 survey, trade war concerns remained the top tail risk cited by global fund managers for the ninth consecutive month.
Strong Case for Gold over Bonds and Stocks? Bernstein Thinks So
Gold’s price saw its fourth consecutive positive monthly return in January. It rose ~3% in the month after its rise of 4.9% in December.
January’s Jobs Report: Analysts’ Expectations
The Department of Labor (VTI) is scheduled to release the January employment data on February 1.
Fund Managers Most Concerned about Corporate Leverage Since 2009
As reported by CNBC, according to the Bank of America Merrill Lynch survey for January, hedge fund managers’ chief concern is corporate leverage.
Credit Suisse: Less Bullish on SPY, Still Positive
Credit Suisse slashed SPY’s target for the end of 2019 from 3,350 to 2,925 in December. The previous target was the most bullish outlook.
Why Gundlach Expects a Wave of Corporate Downgrades to Come
As reported by Reuters, Jeffrey Gundlach called the ballooning US (SPY) (VOO) federal government debt “a completely horrific situation.”
Gundlach: Junk Bond Market Is Flashing Yellow on Recession
Currently, one of the questions on the minds of most investors is whether we are entering a recession.
Jeffrey Gundlach: How to Survive the Market Zigzags in 2019
Jeffrey Gundlach expects 2019 to continue to be a volatile year. The last quarter of 2018 was quite volatile after a prolonged calm in the markets.
US Job Additions and Unemployment: What Do Markets Expect?
The non-farm payrolls for the US (IVV) (QQQ) were 155,000 in November, which underwhelmed economists’ consensus of 198,000.
Why Wall Street Isn’t Hoping for a Strong Jobs Report Tomorrow
The US Department of Labor (VTI) is set to release December employment data on January 4.
Why the Fed Could Make Gold Shine Next Year
A major factor weighing on gold prices this year was the Fed’s tightening cycle.
Why J.P. Morgan Is Bullish on Gold in the Second Half of 2019
In contrast to Bank of America Merrill Lynch’s bullish view on gold (GLD) in 2019, JPMorgan Chase (JPM) expects gold (NUGT) and silver’s (SLV) performance to remain to lukewarm—at least in the first half of 2019.
What Makes Goldman Sachs ‘Extremely Positive’ on Gold in 2019?
Goldman Sachs (GS) turned positive on gold (GLD) for the first time in more than five years back in March.
If This Is the Deep Panic Jim Paulsen Talked About, Start Buying
Jim Paulsen, The Leuthold Group’s chief investment strategist, thinks that after the ugly December for markets, investors’ panic is in the later stages.
How Investors Could Position for the Next Downturn
While talking to CNBC in September, Ray Dalio said that investors should get “more defensive” in the stock market, and warned that stocks’ upside looks limited.
Largest Ever One-Month Rotation into Bonds Signals Pessimism
Another concerning statistic that came to light during the Bank of America Merrill Lynch’s Fund Manager Survey was that investors made the largest ever one-month rotation into bonds (BND).
Jeffrey Gundlach: S&P 500 Headed for More Lows, Fed Shouldn’t Hike
Talking to CNBC, “bond king” and DoubleLine CEO Jeffrey Gundlach said of the Federal Reserve, “I think they shouldn’t raise [rates] this week.”
Goldman Sachs and JPM Think Market Is Wrong on Rate Hike Outlook
Among investment banks, Goldman Sachs (GS) and J.P. Morgan (JPM) are most aggressive on the Fed’s rate hike outlook for 2019.
Beaten-Down Markets Look to the Fed for Some Relief
The Federal Reserve is set to meet December 18–19 for its last policy meeting of the year.
What an Inverted Yield Curve Means for Gold
The yield curve tracks the yields of Treasury securities maturing at different times. For example, the yield of two-year securities (SHY) is usually lower than that of ten-year securities (IEF)(TLT).
Why the US Dollar Could Be Bullish for Gold in 2019
The US dollar (UUP) has been on an upward trajectory in 2018 so far. Year-to-date, it’s up ~7.4% compared to other major global currencies.
Why Jeffrey Gundlach’s Predictions Are Music to Gold Bulls’ Ears
During an investor webcast on December 11, DoubleLine CEO Jeffrey Gundalch painted quite a bearish picture of stocks, bonds, and the US economy (SPY)(DIA).
Bond King Jeffrey Gundlach: ‘Economy Is Poised to Weaken’
DoubleLine CEO Jeffrey Gundlach said that the current inversion of the yield curve could signal that the US “economy is poised to weaken.”
Could the Yield Curve’s Inversion Mean a Recession?
The yield curve mainly reflects bond market investors’ expectations of the Fed’s actions and future economic conditions.
Yield Curve Inverts for the First Time since 2007
A yield curve tracks the yields of Treasury securities maturing at different times.
Will Physical Gold Demand Be Deciding Factor for Gold in H2 2018?
The demand for gold in India (INDA) was lukewarm in the first half of the year, mainly due to stronger equity markets and higher gold prices measured in rupees.
Central Banks Are Accumulating Gold due to Dollar Worries
Central banks have been net buyers of gold (SGOL) since the beginning of the financial crisis of 2008.
Is the Current Sell-Off a Blip—or the Start of a Downtrend?
Whether the recent sell-off in the bond and stock markets is just a blip or the beginning of a sustained downward rally will depend on the upcoming US economic data.
Sell-Off in US Stocks as US Treasury Yields Soar
On October 3, US bond yields (BND) soared due to a bond sell-off. The sell-off continued on October 4, though at a slower pace.
Should You Be Worried about the Possible Yield Curve Inversion?
When the yield curve (BND) inverts, it means that the yields of shorter-duration securities become larger than those of longer-term securities.
Solid US Expansion Should Keep Unemployment at a Multiyear Low
The unemployment rate for July fell 0.1% sequentially to 3.9%, its lowest point in nearly 18 years.
Yield Curve Narrows to Decade Low
A yield curve tracks the yields of Treasury securities maturing at different times.
Fed Officials Are Divided on the Significance of the Yield Curve
While most Fed officials agreed on rates and trade concerns, there was disagreement among them regarding the significance of the yield curve.
Could Physical Demand Come to Gold’s Rescue in H2 2018?
The rupee has depreciated by ~7.0% year-to-date against the US dollar. This event caused local gold prices to rise.
July’s Wage Gains Could Shake the Markets Again
The greatest conundrum in the whole jobs report remains the wage growth. Wages haven’t picked up like they should have.
How Low Can the Unemployment Rate Really Go?
The unemployment rate for June increased to 4.0% from a low of 3.8% in May, which was an 18-year low.
Fund Managers Believe Gold Is Undervalued: Time to Buy?
A record number of fund managers in the BAML (Bank of America Merrill Lynch) July survey believe that gold is undervalued.
What Does the Flattening of the Yield Curve Mean for Gold?
It doesn’t come as a surprise that Wall Street is concerned about a potential slowdown, as the spreads have significantly narrowed between the two-year and ten-year Treasury yields.
Are Rising Rates Affecting Housing Markets?
Rising interest rates increase the cost of owning a home for prospective buyers, but the housing market hasn’t yet felt the impact of rate increases.
What Bond Market Investors Are Watching for This Week
The US bond market continued to rebound as trade tensions and the limited appreciation in equity markets pushed demand for bonds higher, depressing the bond yields for a second consecutive week.
What Drove the Leading Economic Index Higher in May?
According to the June 21 Conference Board report, the May LEI was 109.5—a 0.2% increase from the revised April LEI of 109.3.
How Would Gold React to Foreign Governments Dumping US Debt?
In March and April, several foreign governments reduced their US debt holdings—including T-bills—by $47.6 billion.
One Way China Could Twist Trump’s Arm
There is one economic measure at China’s dispense that could force the Trump administration to back away from its aggressive trade policy.
Will Risk-Off Trade Push Bond Markets Higher?
The US bond market had a limited reaction to the Fed’s 25-basis-point rate hike and the 0.20% increase in interest paid on excess reserves.
Why There Could Be More Room for Inflation Growth
The PPI for final demand in May is reported to have increased by 0.5% month-over-month.
How Could High Inflation Affect the Fed?
During the Fed’s May meeting, the inflation (TIP) target was described as “symmetric,” suggesting that the 2% target would not be used to initiate any dramatic changes to US monetary policy.
Why This Week Could Define the Direction of Monetary Policy
The central banks of the US, EU, and Japan are scheduled to meet this week.
Will Bond Market Investors Benefit from Risk-Off Trade?
The US bond market seems to be benefiting from multiple crises around the world.
What Now as the US Fed Is Close to Meeting Its Targets?
As of June 1, the unemployment rate in the US has dropped to 3.8%—its lowest level in the last 18 years.
Strong Jobs Report Had a Limited Impact on the Bond Market
The US bond market was volatile in May. The ten-year yield reached a peak of 3.1% and fell to a low of 2.8% in a span of three weeks.
Which Sector Posted the Most Job Gains in May?
As per the May ADP employment report, job growth in the professional and business services sector continued to be the key driver for jobs additions.
ADP: May Payrolls Could Be below 180,000
According to the ADP National Employment Report, the US private sector added 178,000 jobs in May.
Are Bond Yields Taking a Breather?
The US bond market had some relief from its ongoing slide as the Fed’s May meeting minutes were less hawkish than expected.
Key Takeaways from May’s FOMC Meeting Minutes
The most recent FOMC meeting was on May 1–2. At the meeting, the range for the federal funds target rate was left unchanged.
How the US-China Trade Deal Could Hurt Global Markets
China invests the trade surplus it has with its trading partners in US government securities (GOVT).
Falling Weekly Claims Signal Overheating Job Market
The Conference Board uses average weekly unemployment claims as a constituent of its Leading Economic Index (or LEI).
Why Drove the Leading Economic Index Higher in April?
The latest Conference Board LEI reading was released on May 17. The LEI for April came in at 109.4, an increase of 0.4% from the March reading of 109.0.
Why Bond Yields Could Increase This Week
US ten-year bond market yields have scaled a new seven-year peak at 3.07, their highest level since July 2011.
Goldman Sachs: 10-Year Treasury Yield Could Reach 3.6% in 2019
Goldman Sachs (GS) said that falling unemployment and the rising budget deficit could drive the Fed’s faster interest rate hike process.
Why Bond Yields Rose on Tuesday
The April retail sales report was released on May 15, and the surprise reaction to this report was an increase in bond (BND) yields across the board.
Bond Yields Fall after April Inflation Data Release
US bond market investors were relieved after the US Bureau of Labor Statistics’ April report, published May 10, indicated a lower-than-expected inflation growth rate.
Why Equity Markets Rose after April’s Inflation Report
US indexes (SPY) are reaching highs as investors ignore possible threats of the US pull-out from the Iran nuclear deal and focus on increasing crude prices.
Why Last Week’s Events Made the Bond Markets Interesting
US bond market yields continue to trend higher, but their overall movement last week was limited.
Disappointing April Jobs Report: Lower June Rate Hike Odds?
For the week ending May 4, the ten-year (IEF) yield closed at 3% and depreciated by 0.8 basis points. The two-year yield (SHY) closed at 2.50%.
ADP: US Job Market Could Be Overheating
According to the ADP April National Employment Report, US private sector employment added 204,000 jobs in April.
Analyzing the Bond Market This Week
This week is important for the bond markets (BSV). Reports are scheduled for inflation, personal income, and non-farm payrolls.
What to Make of Another Uptick in Consumer Expectations
The Conference Board LEI constructed from the March data signals no immediate risks to the US economy (MDY).
Why Yield Curve Steepening Could Be Short-Lived
The US bond markets were under pressure as the yield curve continued flattening until Wednesday last week.
Should We Start Ignoring the Yield Curve Inversion?
No financial indicator is foolproof, and the same can be said about the flattening yield curve in the current economic climate.
Fed Member Mester Says Flat Yield Curve Is Not a Sign of Weakness
Fed member Loretta Mester has sided with Fed Chair Jerome Powell that a flattening yield curve doesn’t signal a weakness.
Why the Markets Are Worried about the Yield Curve
The spread, or the difference between the ten-year and two-year US Treasury bonds, has fallen below 50 bps for the first time since 2007.
US Job Openings Still Near Highs
The BLS released the “Job Openings and Labor Turnover Survey” for February on April 13.
Why Bond Yields Weren’t Affected by the March Inflation Report
US bond market investors are constantly concerned about inflation.
Bond Market Pain Could Continue This Week
If there aren’t any more negative surprises this week, the US bond market could continue to struggle.
FOMC Members Are More Confident about Inflation
The March FOMC meeting minutes indicated that the staff and FOMC members turned bullish on inflation.
Key Takeaways from the March FOMC Meeting Minutes
The last FOMC (Federal Open Market Committee) meeting was on March 20–21, 2018. Overall, the FOMC minutes were “hawkish.”