The head of Bridgewater Associates, the world’s largest hedge fund, says that “the latest sell-off in stocks and bonds is evidence of typical market behavior in the later parts of a cycle and has come sooner than the firm expected.” This according to a recent article on CNBC.com. The article cites a recent blog in which Dalio explains how the current “late-cycle” behavior is more pronounced due to the increased sensitivity of investment assets to… Read More
The ten-year Treasury yield has risen to its highest level since March, reports a recent Wall Street Journal article, and bond guru Bill Gross says, “the move confirms a bear market.” “For some,” the article asserts, “the high of 2017, at around 2.63%, is a key level to watch for whether yields move higher still; for others, the move has already broken out of a downward channel for yields that has persisted for more than… Read More
The market would be hurt if yields on 10-year Treasuries climbed to 3 percent or higher next year, says Jeffrey Gundlach as reported in Bloomberg. The DoubleLine Capital CIO has called president-elect Trump’s policies “bond unfriendly” and says that Treasury yields above 3 percent (benchmark Treasuries are currently trading below 2.5 percent) “would start to have a real impact on market liquidity in corporate bonds and junk bonds.” Gundlach says that he will be looking… Read More
Chris Tessin of Acuitas Investments recently authored a piece for the InvestmentNews that outlined the historical pattern of micro-cap and small cap outperformance during periods of rising interest rates. Tessin notes that small firms have now lagged large cap names on a 1, 3, 5 and 10-year basis, and that relative underperformance is now producing an investment “opportunity”. According to Tessin, smaller firms have a history of outperforming during periods of increasing interest rates, and… Read More