Salient to Investors: David Kostin, Kathy Matsui, Peter Oppenheimer et al at Goldman Sachs lowered their rating on stocks to neutral and corporate credit to underweight on belief that global equities and bonds may drop in the next 3 months, and stocks may temporarily fall, as rising inflation boosts government bonds and
READ MORE... →Salient to Investors: Russ Koesterich at BlackRock said volatility is very low because monetary conditions are easy but when investors see the US and UK central banks tighten then we will get a long-awaited rise to normal levels, but not to those of 2008 with the VIX at 90. Pimco expects a new
READ MORE... →Salient to Investors: The last two Fed tightening cycles saw gains in debt securities from Treasuries to junk bonds: between June 2004 and June 2006 when the Fed raised rates to 5.25 percent from 1 percent, and in the 7 months ended January 2000 when rates rose 1.75 percent. Paul Zemsky at Voya Investment
READ MORE... →Salient to Investors: Fed officials are approaching their goals for full employment and price stability faster than they had forecast. Most FOMC members believe the Fed will not raise its benchmark rate until 2015, with the median forecast calling for 1.13 percent at the end of 2015 and 2.5 percent
READ MORE... →Salient to Investors: Global debt complacency is evidenced by investor enthusiasm for the debt of Ecuador, Clear Channel Communications, China’s Logan Property Holdings, Greece’s Hellenic Petroleum, Florida’s Orange County Industrial Development Authority. Japan’s Government Pension Investment Fund is even considering venturing into junk bonds. Almost any borrower is able to raise
READ MORE... →Salient to Investors: Sabine Lautenschlaeger at ECB said radical programs such as QE should only be considered in real emergency situations, like imminent deflation, because the side effects are especially significant, but said that those risks are neither visible nor expected. Benoit Coeure at ECB said rates will remain very
READ MORE... →Salient to Investors: Tom Stringfellow at Frost Investment Advisors expects interest rates to rise sooner than people expect, causing a knee-jerk reaction, but not at a rate that derails this stable environment. Jan Hatzius at Goldman Sachs expects the Fed to raise rates in Q3 2015. The S&P 500 is
READ MORE... →Salient to Investors: The economy resembles the 1970s more than the 1990s. Alan Blinder at Princeton sees risk of the economy moving in the same direction as it did after 1973, though we are a long way from seeing a sustained rise in inflation. Blinder said the long-term trend in
READ MORE... →Salient to Investors: Economists say the surge in part-time employment last month takes little away from the overall picture of steady progress in the labor markets. Millan Mulraine at TD Securities USA said the turn in labor market dynamics in favor of full-time employment started in late 2013, and the
READ MORE... →Salient to Investors: If too many people decide to get out of bond funds at the same time, the wave of selling could swamp the market, forcing fund managers to unload their bonds at rock-bottom prices in a downward spiral. Ira Jersey at Credit Suisse says taxable bond funds have
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