Salient to Investors: TrimTabs Investment Research and the Money Fund Report report bond funds saw $61.7 billion of withdrawals last week. Market bears say yields barely exceed inflation, leaving little relative value in bonds as the global economy improves. Pimco, BlackRock, and DoubleLine Capital say the worst is over because the
READ MORE... →Salient to Investors: Binky Chadha at Deutsche Bank said the market had been pricing in that the Fed would normalize rates much more slowly than it has done historically, and the shock has spilled over across all of the asset classes. The World Bank said the world economy will expand 2.2 percent
READ MORE... →Salient to Investors: Bond managers are telling investors the worst may be over for T-bonds after 10-year yields rose to a 22-month high. Jeffrey Gundlach at DoubleLine Capital says July will not be the same type of month and 10-yr yields will be meaningfully lower by the end of 2013 Gundlach said
READ MORE... →Salient to Investors: Bill Gross at Pimco said: Bond yields and risk spreads were too low 2 months ago and global markets that were too leveraged are now reducing risk The Fed tilted over-risked investors to one side of an overloaded and over-levered boat when discussing tapering, so don’t panic.
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: 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: Bill Gross at Pimco cut his local-debt allocation in the Total Return Fund by 1 percent to 4 percent in May, the lowest since July, and reduced Treasuries to 37 percent of the fund’s assets in May, but says the Fed will not raise interest rates for years, making
READ MORE... →Salient to Investors: Tomoya Masanao at Pimco said: Investors should be wary of high-yield borrowers as slowing growth in Asia threatens profitability. China will average 6 percent to 7.5 percent annual growth during the next 5 years versus 9 percent annual for the past 5. Companies in Asia outside Japan almost tripled junk bond sales
READ MORE... →Salient to Investors: Bill Gross at Pimco cut holdings of Treasuries but says the Fed is unlikely to reduce QE in the near-term, and says he is sticking with bonds as long as Fed does. Gross has been advising investors to sell riskier assets and buy government debt, including inflation-linked securities and nominal
READ MORE... →Salient to Investors: Bill Gross at Pimco said: The Fed will not taper with unemployment rising to 7.6 percent and very dire metrics for the average work week and wages, but a more normal economy requires the Fed to raise interest rates to more normal levels because QE and low interest rates are distorting capital
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