Salient to Investors: Unemployment at 7.5 percent, estimates for the narrowest budget deficit since 2008, and a 1.1 percent inflation rate are keeping yields and volatility contained despite disunity among Fed officials over when to curtail QE. Gary Droscoski at GAM USA expects the sideways move to continue for the next couple of months
READ MORE... →Salient to Investors: Jonathan Golub at UBS recommends overweighting consumer-discretionary stocks. Golub said consumer strength will have a positive impact on a host of industries, whereas businesses remain hesitant to put cash to work. Golub is neutral on industrial and tech stocks. The consumer-discretionary index is the top performer among the S&P 500’s
READ MORE... →Salient to Investors: US balanced funds received record inflows of $35.2 billion from January to April, the most in any four months, showing easing individuals’ reluctance to join the record-breaking rally in the S&P 500 Index. Inflows into hybrid funds reached records in February 1994 in the middle of a 417 percent gain
READ MORE... →Salient to Investors: Morgan Stanley said ETF selling and a stronger dollar is the largest headwind facing gold, so should either trend ease, physical demand via jewelry sales and central bank buying could provide key support. Feng Liang at GF Futures said prospects for the US economy remain positive and expectations
READ MORE... →Salient to Investors: Fareed Zakaria writes: Bret Stephens at the Wall Street Journal says Americans are about to repeat the lessons of the 1930s, when isolationism led to Hitler and WWII. Yet America spends more on defense than the next 10 great powers put together. Obama’s worldview is rooted in
READ MORE... →Salient to Investors: A panel of academics and executives said if Japan fails to show concrete success in fiscal reform, the large bond purchases by the BoJ over the next 2 years could be seen as debt monetization, causing a sharp spike in yields and weakening the effect of monetary easing. The
READ MORE... →Salient to Investors: Money managers cut their net-long position of futures and options to the lowest since July 2007, while holdings of short contracts rose to a record. Dan Denbow, a fund manager at the $1 billion USAA Precious Metals & Minerals Fund said gold has so many drivers that it gets
READ MORE... →Salient to Investors: Hometrack said UK house prices rose 0.9 percent in London, the most in 6 years, primarily driven by a shortage of properties, while average prices in England and Wales increased 0.4 percent, the biggest monthly increase since May 2007. London demand is up 15 percent in the past 6 months, while supply
READ MORE... →Salient to Investors: Fareed Zakaria said: The data is increasingly convincing that the Keynesians have been right, cutting spending in the kind of recession we have gone through will only hurt growth not help it. But spending on its own is not enough. For sustained growth in the long-term, countries
READ MORE... →Salient to Investors: Nobel laureate Joseph Stiglitz said it is premature for the Fed to reduce monetary stimulus despite little evidence it has helped the economy, which is not back to normal. Stiglitz said the stimulus may have contributed to asset price bubbles and to a weaker dollar. Zhu Min at the
READ MORE... →