Refreshing his legal dispute with his neighbor, investment pro Bill Gross has some ideas about the stock market and the bulls are not liking it.
The veteran bond-fund manager, once regarded as the ‘bond king’ on Wall Street, has been focused on the specifics of the market until recently — until his withdrawal from Janus Henderson in 2019. .
But recent moves in the markets have apparently forced Gross to deliver his monthly market outlooks, not to mention the conclusion of his legal dispute with his neighbor, including “The Island of Gilligan.” The explosion of the theme song was included.
“But don’t think about looking further away from Gilligan, Skipper and SS Minoan and on important matters like the ‘Wonder Woman 1984’ review (100% green tomatoes) and maybe the bubbly stock market,” Gross writes.
“So why is it that stocks are very high and IPOs like Dorsche Deutsche,
80 percent and AirBNB ABNB on the first day of issue
… Robinhood and speed rule, ”he concludes.
“It is market-driven — yes — by intense speculation, but also allegedly by the pump, central bank-primary corporate income, which when discounted to near zero nominal and in many cases negative real interest rates presents value If given, record stock prices arise, ”wrote Gross, referring to rates that sit at around 0% and 0.25% and real yields, bond yields to inflation, traded in the subzero region Huh.
This means that investors are earning very little on savings or are actually prepared to lose money for the perceived security of government bonds that adjust for inflation.
In that world, investors are being driven to riskier areas of the market, the gross note.
“My point though is that real January 10-year Treasury yields have declined by 200 points since January 2019, playing a significant role in the 50% price increase in the S&P 500 over the same period,” referring to the 10-year Treasury Gross wrote note yield TMUBMUSD10Y,
Which is less than 1% compared with the total yield for the S&P 500 Index SPX,
At 1.6%, FactSet data show.
The 76-year-old investment proponent pointed to the Federal Reserve’s asset purchasing programs and other stimulus measures that are providing an extraordinary backstop in the financial markets, as well as a fiscal relief package from Washington, as part of the underpinning for the investor face Which he considers to be bloated.
He also suggests that the market and economy may have a habit of injecting government.
“And how many fiscal packages can the stock market stand before it turns out that GDP is now opioid-like, dependent on more and more dollars from Washington that give our Republican supply-side capitalist beef a” gasp! “- is like universal income. ‘Sluggish like Europe?”
For now, Gross Jones appears to attribute the lion’s share of recent gains to the industrial average DJIA,
Development companies in S&P 500 Index and Nasdaq Composite Index comp
Including Tesla TSLA,
uberlow and force for negative interest rates.
It is unclear how long the beat becomes for markets in 2021, however, the gross note.
His report for January, after Gross and his partner, Amy Schwartz, was ordered by Superior Court Judge Kimberly Nil not to violate the noise provisions of the Laguna Beach municipal code or to play music on its outdoor speakers and at least They were instructed to stay up to 16 feet away from their seaside neighbor.
The ruling Gross’s neighbor, Mark Tufik, complained about a large glass statue, alleging a “targeted campaign of harassment” after saying he was erected without a permit. Gross also played the theme for the sitcom Gilligan’s Island and other loud music, Taufiq’s complaint, repeated in retaliation for showing court documents.