PIMCO’s Bill Gross names ‘the only safe haven’ in this market
Proceed with caution! That’s the
investing advice from the legendary Bill Gross, founder and managing
director of PIMCO, on this jobs day that saw July’s number come in under
analyst expectations. Gross says the recent movement of the markets
here and abroad has little to do with such economic data and most likely
won’t be greatly impacted by it either.
Instead, he says, “It speaks to
the potential for a global mini trade war between Russia and the rest of
the world and it speaks to Argentina in terms of a default and a
potential for bond investors in other countries to simply say ‘ya know
it’s not worth the risk.’”
Gross also notes that this
market is particularly strange at the moment and cite the unusual
occurrence of German bunds going “up in yield and down in price during
the same time in which risk markets, equity markets, go down in price.”
While such an unusual and
unpredictable market might make many investors legitimately nervous
Gross reminds us it’s simply “a global marketplace that is deflating and
de-levering to a certain extent. It’s not Lehman Brothers of 2008.”
So where should you be camping
out right now? “It appears the only safe haven,” Gross says, “is the
front end of the U.S. yield curve in which the market expects the Fed to
stay on hold for longer.”
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