|Bid||80.35 x 3100|
|Ask||80.98 x 1000|
|Day's Range||80.75 - 80.98|
|52 Week Range||77.46 - 80.98|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.03|
|Expense Ratio (net)||0.05%|
Why Jeffrey Gundlach Thinks We're Still in a Bear Market(Continued from Prior Part)A “crackpot” ideaJeffrey Gundlach is very concerned about the increasing debt in the US economy. During the “Highway to Hell” webcast, he also completely
Transport equities have rebounded of late as the asset category is trading at the lowest valuation in a long time. The advance earned transport stocks the first place in the list and were followed by bonds, which saw falling yields lately as risks to the global economy increased. Africa equities took the middle spot and were followed by the European shared currency, which was hit by a strong dollar and a dovish European Central Bank. Silver closes the list. Check our previous trends edition at Trending: Palladium Shoots up on Supply Shortages and Strike Fears.
U.S. bonds rose on Tuesday after data from the Institute for Supply Management revealed that the services sector expanded by 5.3 percent during the month of February, according to its non-manufacturing index. According to Larry Milstein, head of government and agency trading at R.W. Pressprich & Co, bond investors are basically taking a wait-and-see approach with respect to interest rates before making any moves. Last week, Federal Reserve Chairman Jerome Powell said that “crosscurrents and conflicting signals” are warranting a patient approach with respect to interest rate policy.
Over the past several years, some of the largest issuers of exchange traded funds, including BlackRock’s iShares and State Street’s SPDR ETFs, have reduced fees on existing ETFs, introduced new low-cost ...
Vanguard Group has trimmed the fees on a handful of ETFs in the latest round of cost cutting on a number of products to gain an edge on competitors as an increasing number of investors look to cheap investment options.
Gundlach: Could US Economic Indicators Be Signaling a Recession?(Continued from Prior Part)Gundlach still thinks we’re in a bear marketIn December, Gundlach said, “I’m pretty sure this is a bear market.” He pointed out that even FAANG
Gundlach: Could US Economic Indicators Be Signaling a Recession?(Continued from Prior Part)Leading indicators After being asked about the timing of the next recession during his interview with Yahoo Finance, Jeffrey Gundlach said that while the
Gundlach: Could US Economic Indicators Be Signaling a Recession?(Continued from Prior Part)Gundlach on government debt Jeffrey Gundlach has long been warning markets about the risk that excess leverage in the system poses. During his annual Just
BAML Survey: Fund Managers Aren't Optimistic about Recent Rally(Continued from Prior Part)Trade war still investors’ top concernIn Bank of America Merrill Lynch’s February 2019 survey, trade war concerns remained the top tail risk cited by
BAML Survey: Fund Managers Aren't Optimistic about Recent RallyBAML survey and fund managers BAML (Bank of America Merrill Lynch) conducted a survey that polled 218 global investors with $625 billion in total assets under management between February
Strong Case for Gold over Bonds and Stocks? Bernstein Thinks SoGold’s gains Gold’s price (GLD) saw its fourth consecutive positive monthly return in January. It rose ~3% in the month after its rise of 4.9% in December. The major driver of
January’s Jobs Report: Analysts' ExpectationsUS jobs reportThe Department of Labor (VTI) is scheduled to release the January employment data on February 1. The report’s immediate market-moving impact declined after Fed Chair Jerome Powell’s
January BAML Survey: Fund Managers Bearish, but No Recession Yet(Continued from Prior Part)Concerns about corporate leverageAs reported by CNBC, according to the Bank of America Merrill Lynch survey for January, hedge fund managers’ chief concern
Most of Gundlach’s 2018 Calls Were Spot On—What about 2019? (Continued from Prior Part) ## Gundlach on US federal debt As reported by Reuters, Jeffrey Gundlach called the ballooning US (SPY) (VOO) federal government debt “a completely horrific situation.” In 2018, total US debt increased by $1.4 trillion, far more than the ~$900 billion budget deficit. Gundlach also said that the United States could be at a “tipping point” in a “debt-compounding cycle.” He asked, “Are we growing at all or is it all just the increase in debt?” ## Ballooning interest costs Moreover, Gundlach cited data provided by the CBO (Congressional Budget Office), which reflect rising interest costs for the US government. The CBO expects debt to reach 3.7% of GDP by 2035 from ~1.4% in 2015. ## Corporate leverage is also bad Gundlach is also focused on corporate leverage and said that there is a significant risk of downgrades in the BBB space as leverage has risen to near record highs. Gundlach used a historical leverage ratio analysis to highlight how large a portion of BBB rated bonds (BND) would be junk (JNK) right now. As reported by Yahoo finance, Gundlach said, “Actually, 45% of the entire investment grade bond market would be rated junk right now … based on leverage ratios. Forty-five percent.” Gundlach has also stated that while downgrades have started to happen, even more should have happened already. He thus expects a wave of downgrades to come. Continue to Next Part Browse this series on Market Realist: * Part 1 - Most of Gundlach’s 2018 Calls Were Spot On—What about 2019? * Part 2 - Jeffrey Gundlach: How to Survive the Market Zigzags in 2019 * Part 3 - Gundlach: Junk Bond Market Is Flashing Yellow on Recession
Most of Gundlach’s 2018 Calls Were Spot On—What about 2019? (Continued from Prior Part) ## How near are we to a recession? Currently, one of the questions on the minds of most investors is whether we are entering a recession. According to a chart shown by Jeffrey Gundlach, if we consider the way junk bond spreads have generally behaved six months ahead of recessions, we’ll find that there’s no immediate contraction on the horizon. He notes, however, that according to the red line in the graph above, the recession risk is rising even if it’s still relatively early. ## Flashing yellow Gundlach is somewhat concerned about the high-yield junk bond (JNK) market, which he’s said is now “flashing yellow.” He added that while this could be a “false negative,” it’s “something we’re going to have to watch very, very carefully.” Gundlach also thinks that the corporate bond market has the potential for negative surprises. He thus advises investors to use the strength of junk bonds as a gift and get out of them. ## Yield curve and recession fears Regarding his outlook on the yield curve, the bond king has said that contrary to conventional wisdom, he expects the bond curve (TLT) (BND) to steepen. He noted that the yield curve will flatten but will steepen before a recession begins. At the beginning of December, part of the US Treasuries yield curve inverted for the first time since the recession, with the spread between five- and three-year Treasury yields narrowing to -0.01 percentage points. The most-watched spread, the one between the two- and ten-year Treasury yields, also narrowed the most it had since the previous recession. The markets (DIA) (IVV) have been concerned that more hikes from the Fed could invert the curve, which has usually been an accurate predictor of upcoming recessions. Continue to Next Part Browse this series on Market Realist: * Part 1 - Most of Gundlach’s 2018 Calls Were Spot On—What about 2019? * Part 2 - Jeffrey Gundlach: How to Survive the Market Zigzags in 2019 * Part 4 - Why Gundlach Expects a Wave of Corporate Downgrades to Come
Jeffrey Gundlach expects 2019 to continue to be a volatile year. Gundlach believes that higher yields on bonds (HYG) (BND) will hurt stocks in what he’s called a “tug of war,” as reported by CNBC. Gundlach believes that due to buybacks, the equity markets have turned into a collateralized debt obligation residual, which he believes is “getting thinner and thinner, riskier and riskier.” He added, “So, the balance sheets of corporations are balanced on ever-dwindling equities as they buy back shares and increase their leverage ratios.
The non-farm payrolls for the US (IVV) (QQQ) were 155,000 in November, which underwhelmed economists’ consensus of 198,000. October’s non-farm payrolls (or NFP) were also revised down to 237,000 from 250,000 previously, while September’s NFP were revised higher by 1,000 to 119,000. After last month’s weaker job additions, economists are expecting payrolls to come in at 180,000, which is lower than the average for the first 11 months of 2018 but still healthy.
The US Department of Labor (VTI) is set to release December employment data on January 4. What Wall Street wants from the December jobs report is not very clear. While a strong jobs report would mean continued strength in the US economy, it could also entail a continuation of gradual rate hikes by the Fed. The markets definitely don’t want to see this at the moment.
Is Gold Ready to Fly in the New Year? Investors’ economic and earnings outlook for 2019 is getting bearish. Leading indicators are signaling a slowdown in US economic growth, and earnings’ approaching deceleration is worrying investors.