Salient to Investors: International net selling of long-term US equities, notes and bonds in March was the largest since May 2009 and shows investors were willing to seek higher-yielding assets amid signs of a stronger US economy. Gennadiy Goldberg at TD Securities said the data does not suggest a pronounced global investor
READ MORE... →Salient to Investors: For the first time since 2009, US bond yields are rising at the same time inflation is slowing, and Treasuries are offering the highest real yields in more than 2 years. Andrew Wickham at Insight Investment Mgmt said inflation is not a big threat while it is
READ MORE... →Salient to Investors: Bill Gross at Pimco raised Treasuries holdings to 39 percent in April, the highest level since July 2010, and warned that investors face potential losses from global central banks’ unprecedented monetary stimulus. Gross said Treasuries are a better alternative than cash, and negative real interest rates, inflation, currency
READ MORE... →Salient to Investors: Berkshire Hathaway sold 5-yr and 30-yr securities offering the company’s lowest coupons for those maturities ever, while it has reduced its bond investments and corporate debt in the last 3 years, while fixed-income investments excluding mortgage-backed debt due in 1 year or less has grown to 25 percent
READ MORE... →Salient to Investors: Hedge funds using debt-trading strategies are expanding at a record pace as they profit from risks big banks are no longer taking. Roy Smith at NYU said regulators in the US and Europe want to transfer risk to the shadow-banking system and interferes capabilities of the large banks
READ MORE... →Salient to Investors: Bond investors are gaining confidence that Bernanke will unwind the Fed’s $3.3 trillion balance sheet without sparking a crash similar to 1994. Money managers from JP Morgan to Fidelity say this time will be different, in part because of Bernanke’s transparency. Edward Fitzpatrick at JPMorgan said the Fed’s transparency should help offset
READ MORE... →Salient to Investors: The wealth effect from rising house prices may no longer be as effective in spurring the US economy as homeowners increasingly pay down mortgage principal and shorten maturities. Freddie Mac said cash-in refinancings outnumbered cash-outs by more than 2-to-1 in Q4 2012. Amir Sufi at the University of Chicago said the
READ MORE... →Salient to Investors: Mohamed El-Erian at Pimco said the inherent momentum of the US economy is still weak so the Fed may increase its efforts to support the economy following a meeting tomorrow by changing the narrative away from the Fed taking its foot off the accelerator. Kei Katayama at Daiwa SB Investments is below
READ MORE... →Salient to Investors: Terry Sandven likes the risk reward for equities but says it’s a ride the highs, buy the dips market. Frederic Dickson at D.A. Davidson said investors are tiptoeing in to figure out if it’s too hot or too cold. The majority of economists expect the Fed will lower
READ MORE... →Salient to Investors: Douglas Swanson at JPMorgan Chase said Fed tapering is not going to happen too early, and on recent data, that’s a lot less likely to happen in 2013. Swanson said Bernanke has been consistent and more aggressive than the market anticipates. Dan Greenhaus at BTIG said investors are not convinced
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