Salient to Investors: Jeffrey Gundlach at DoubleLine Capital said: The Shanghai Composite Index is worth a speculation, but his favorite stock market long-term is India. Yields on 10-yr US Treasuries may reach 2.65% this year. Does not own any foreign currency bonds – the biggest risk in a rise in yields
READ MORE... →Salient to Investors: Scott Minerd at Guggenheim Partners writes: The world is awash with liquidity and the promise of more easy money and QE in Europe bodes well for equities and bond prices. The recent high of the NYSE Advance-Decline Line is bullish. In Europe, negative deposit rates should encourage commercial banks
READ MORE... →Salient to Investors: Jonathan Mackay at Morgan Stanley Wealth Management said investment-grade bonds will post annual returns of 1% to 2% for the next 7 years versus 8.7% average annual gains in the 30 years through 2012 – Fed stimulus is supporting bond values but lowering portfolio returns. Michael Hartnett at
READ MORE... →Salient to Investors: Bill Gross at Pimco said: Insufficient credit creation with 2% economic growth jeopardizes US growth because our credit-based financial economy depends on an ever-expanding outstanding level of credit for its survival. If the credit growth is more than 4.5% a year, then private and public sectors must create
READ MORE... →Salient to Investors: Thomas di Galoma at ED&F Man Capital Markets said the yield curve is flattening partially because there is no inflation, while real returns are very high and there is nowhere to put your money but the long end. The yield gap between 5- and 30-yr Treasuries is
READ MORE... →Salient to Investors: Jan Hatzius at Goldman Sachs said: There is little evidence of the “pent-up wage deflation” that Yellen cites as a possible reason behind the slow increase in earnings and says the opposite was true, with the areas having below-average wage growth during the recession now showing above-average
READ MORE... →Salient to Investors: Diane Vazza et al at S&P said: The US distress ratio of bonds is at 5.4% versus the 3-year low of 4.7% in May. A rising distress ratio is typically a precursor to more defaults when accompanied by a severe and sustained market disruption. Read the full article at http://www.bloomberg.com/news/2014-08-22/risk-of-defaults-in-distressed-debt-is-climbing-s-p-says.html
READ MORE... →Salient to Investors: Todd Salamone at Schaeffer’s Investment Research said the Fed raising rates sooner than expected is still a big ‘if.’ The S&P 500 has not had a decline of 10 percent in almost 3 years and trades at 17.8 times reported earnings, near the highest level since 2010.
READ MORE... →Salient to Investors: Pundits calling for a huge decline in equities are either the absolutely certain types, who have stuck to their prediction for years, and the less media-savvy academics and heads of research at big investment firms who see a decline but after the market goes higher. The last
READ MORE... →Salient to Investors: Michael Bryan at FRB of Atlanta said restaurant menu prices do not change as often as many other goods and services so increases signal restaurant owners see inflation rising as sticky prices give a much better idea of future inflation. The sticky CPI, which only includes items
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