• Ten Year Treasuries touched 5% on October 19th, up 1.43% since Jan 1. • Two-year rates exceed ten-year rates in July of 2022 (yield curve inversion). • In the past, yield curve inversion has always signaled recessions. • The recessions typically have occurred 18-24 months after inversion. Over the course of the past months, […] Read the full article…
• The Federal Reserve is aggressively raising rates (1.5 – 1.75%), but continues to lag the market with 2-year Treasuries at (2.8% on July 5). • The economy is likely to go into a recession, if not already in one (based on the Atlanta Fed GDPNow forecast). I expect the recession to be shallow. • […] Read the full article…
Inflation is a highly persistent topic for the media and for some clients as well. Today, let me summarize my outlook and portfolio strategy. • We have short-term inflation; Long-term inflation is the open question • Much of the inflation we do have is due to supply-demand shocks • Consensus opinion of macro economists & […] Read the full article…
• Gundlach thinks recession signals are close, but not signaling recession right now. • Interest rates are a wild card as the Fed switches from ‘pragmatic’ to ‘put’ mode. • Gundlach thinks European equities are a value trap. He likes emerging markets (still). • His strongest warning was to avoid junk bonds and beware of […] Read the full article…
Dan Ivascyn is the Chief Investment Officer and co-manages the Pimco Income Fund with Alfred Murata. Mr. Ivascyn, along with Mr. Murata, was named fund manager of the year by Morningstar in 2013. On Tuesday, Bloomberg reported that it is time to ‘take a more cautious and defensive strategy’ with the $113B Pimco Income Fund. […] Read the full article…
In the last several months, it would have been hard to miss the flurry of articles discussing the flattening yield curve and likelihood that a recession is near. Here are just a few examples, “The U.S. Yield Curve Is Flattening and Here’s Why It Matters”, “Replace Yield Curve as a Recession Predictor? The Fed Considers […] Read the full article…
Jeff Gundlach, CEO of DoubleLine Capital, covered his outlook for the markets in his annual webcast on Tuesday. The webcast covers a wide range of topics including the economy, inflation, interest rates and fixed income and equity market outlooks. He presents dozens of slides to illustrate and back his convictions. I’ll highlight his key forecasts […] Read the full article…
According to the Morningstar Direct U.S. Asset Flow Update published June 15th, US taxable bond funds had a net inflow of $15.4 billion in May. The report indicates that flows for bond funds were mostly negative last year. Beginning in February this year, flows turned positive after the market volatility in January. The report also […] Read the full article…
Given recent events in the financial markets such as Fed rate hikes and weakness in oil prices, we are seeing increased volatility in certain bond sectors. In this piece, I’ll review recent performance and future outlook with an emphasis on bond funds we hold in Brightwood Ventures model portfolios. Recent Performance Bond sectors vary […] Read the full article…
Our model portfolio process includes periodic review and short term tactical allocation decisions based on market conditions. In this article, I will focus on my current thinking regarding model portfolio bond allocation. In particular, the primary questions relate to interest rate risk with respect to the anticipated interest rate hikes. […] Read the full article…