Salient to Investors: Matt Dalton at Belle Haven Investments said: Demand for munis may rebound in July as investors deploy cash from principal and interest payments and this year’s outflows will push yields high enough. The muni market has been brutal, but will turn around in the next few weeks.
READ MORE... →Salient to Investors: 10-year Treasuries yield 2.61 percent versus the S&P 500 aggregate earnings yield of 6.4 percent – more than double the average spread of 1.9 points since 2000. Investors are avoiding longer-term Treasuries, concerned that returns will be depressed for years, and money managers foresee the end of a rally that
READ MORE... →Salient to Investors: Ethan Anderson at Rehmann Financial said investors have been shaken by the concept of rising interest rates, a reduction in Fed stimulus, and uncertainty about the Chinese central banking system. Goldman Sachs cut its 2013 forecast for China’s economy and said the cash squeeze is hurting growth. Vasu Menon
READ MORE... →Salient to Investors: Nouriel Roubini writes: Gold spikes in times of serious economic, financial and geopolitical risks, but that does not make it such a safe investment – cf sharp falls in gold prices during crisis periods of 2008 and 2009. Gold performs best in times of high inflationary risks
READ MORE... →Salient to Investors: Nouriel Roubini writes: Exiting too fast from QE will crash the real economy, while exiting too slowly will first create a huge bubble and then crash the financial system. If the exit cannot be navigated successfully, a dovish Fed is more likely to blow bubbles. Read the
READ MORE... →Salient to Investors: Fareed Zakaria said: Japan desperately needs real reforms that open up the economy and make it more friendly for business. The Economist says a Japanese company has to actually go out of business to be able fire any of its workers. Japan is 134th out of 144
READ MORE... →Salient to Investors: Cecilia Gondor at Thomas J. Herzfeld Advisors said closed-end funds have sold off since May due to concern that the underlying value of the bonds they hold will suffer should the Fed taper QE. Gondor said retail investors looking for income gravitated to the Pimco funds because they see Bill
READ MORE... →Salient to Investors: 44 percent of economists see the start of tapering in September, 15 percent in October, 28 percent in December, and 13 percent not until at least 2014, while 44 percent expect the Fed to halt bond buying entirely in June 2014. Chris Rupkey at Bank of Tokyo-Mitsubishi UFJ said
READ MORE... →Salient to Investors: Themistoklis Fiotakis at Goldman Sachs said to curtail widening current account deficits, the Turkish lira, South African rand and Indian rupee would need to depreciate 30 percent on a trade-weighted basis, while the Brazil real and Chile peso need to fall 20 percent. Fiotakis said the EM bond
READ MORE... →Salient to Investors: James Bullard at FRB of St. Louis said: The Fed may need to increase monthly asset purchases above the current $85 billion pace if inflation slows further below its 2 percent goal. The FOMC should signal more strongly its willingness to defend its inflation goal. The Fed inappropriately timed
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