Gross on Threats to Economy Going Forward

The quantitative easing that has occurred in the post-Lehman era has led to a situation, writes fund manager Bill Gross in a recent Barron’s article, where central bank balance sheets are replete with equities “in a desperate effort to keep global economies afloat.” Concurrently, he argues, more than $5 trillion of investment grade bonds “trade at negative interest rates in what can only be called an unsuccessful effort to renormalize real and nominal GDP growth rates.” This environment, he warns, presents a degree of economic uncertainty down the road because both central bankers and private economists rely on historical models […]

Bill Gross Forecasts Below-Par Economic Growth

In a recent article for Barron’s, fund manager Bill Gross argues that investors have “resorted to ‘making money with money’ as opposed to old-fashioned capitalism when money and profits were made with capital investment in the real economy.” This, he argues, will suppress real economic growth going forward. Gross explains that factors such as the replacement of workers with robots and trade-restrictive government policies present a “counterforce to creative capitalism in the real economy” which in turn causes investors to sense future threats to consumer demand and investment returns. So, instead of channeling dollars into the real economy, they turn […]

Pimco’s New Investment Chief Bears Little Resemblance to Bill Gross

Dan Ivascyn, successor to Pimco co-founder Bill Gross as the firm’s investment chief, is overseeing what is characterized in a recent Wall Street Journal article as “a new direction taken by the California money manager as it recovers from the most tumultuous period in its history.” Gross resigned from Pimco in September of 2014 in the wake of much unrest. The article explains, “Hundreds of billions in client money followed Mr. Gross out of Pimco,” but Ivascyn was able to “stop the outflows with a team of managers who oversees more than $1.5 trillion—one of the largest asset pools anywhere […]

Bill Gross Warns Investors to Preserve Capital

Under current conditions, warns bond guru Bill Gross, investors would be well served to focus more on preserving capital than earning high returns, according to a recent CNBC article. Given the huge amount of debt on our country’s books (upwards of $65 trillion), Gross says, “Our highly levered financial system is like a truckload of nitroglycerin on a bumpy road.” Manager of the $1.9 billion Janus Unconstrained Bond Fund, Gross feels that the Fed has held things steady so far, but has to be careful not to raise rates so much that the cost of capital becomes prohibitive but enough […]

Gundlach Says the Bond Bull Dies at 3%

Jeffrey Gundlach says that a yield of 3% on the ten-year Treasury bond would represent the end of the three-decade bond rally, according to a recent Bloomberg article. The DoubleLine CEO’s threshold differs from the one set by Janus’s Bill Gross, who believes that 2.6% would signal the end of the bull. Yields on 10-year Treasuries surged after the presidential election to as high as 2.59% (on December 15th, after an all-time low of 1.35% on July 8th). Today, the yield stands at 2.49%. Gundlach argues that Trump’s election and tax-reform policies have “fueled rising confidence among corporate executives, small-business […]

Gross Doubts 2% Growth Rate

Billionaire Bill Gross says that the 10-year Treasury yield moving  above 2.6%  is a more important event than the Dow hitting the 20,000 milestone, according to a recent Investment News article. The manager of the $1.8 billion Janus Global Unconstrained Bond Fund argues that a rise to above 2.6% would “mark an end to the three-decade bond bull market,” and that “it is the key to interest rate levels and perhaps stock price levels in 2017.” While the nation has high hopes that the new administration will deliver GDP growth to the tune of 3%, the article says Gross considers […]

Bill Gross on Weak Credit: Do Not Pass Go

It might sound like an oversimplification to discuss the current state of the credit markets in terms of a Monopoly game, but that’s exactly what Janus fund manager William Gross does in a recent Barron’s article. In particular, Gross compares a player’s passing of “Go” and collection of $200 as representing “new credit that is responsible for the ongoing health of our finance-based economy.” Without it, he argues, “economic growth moves in reverse and individual player ‘bankruptcies’ become more probable.” To expand on the metaphor, Gross explains that in today’s economy central banks are more akin to Monopoly’s “community chest” […]

Investors Should Adjust Return Expectations Says Janus’ Gross

Investors have a better chance of seeing a repeat of the past 40-years on the planet Mars than they do here on earth, says William Gross, manager of the Janus Global Unconstrained Bond fund (JUCTX). In his recent Barron’s article, Gross argues that fund managers know they’ve had a great run given decades of high bond returns amidst low volatility. Even during significant bear markets (like the early 80’s), he notes, 30-year Treasury yields reached 15%. Stocks have followed a rockier trajectory, he says, but annual returns (including dividends) have still been over 3% higher than those of investment grade […]

Gross Talks "New Neutral"

In the aftermath of the 2008 financial crisis, bond guru Bill Gross spoke of a “New Normal” for US economic growth. Now he’s talking about the “New Neutral” for interest rates, and the impact it will have on investors.

Roundtable: Gross, Herro, Cohen And Others On What To Expect In 2015

A number of the world’s top investment strategists recently gathered for Barron’s annual roundtable to offer their thoughts on where the economy and markets are heading. David Herro, Abby Joseph Cohen, Bill Gross, and Marc Faber were among those who participated, and overall the mood was subdued. “On the whole, they expect interest rates to stay unnaturally low, and the U.S. to lead the world in economic growth,” writes Barron’s Lauren R. Rublin. “Yet, they doubt that will translate into robust gains for the stock market. Scott Black’s expectation that the Standard & Poor’s 500 will return 10% this year […]

Gross: The End Is Near

Bond guru Bill Gross says that the good times are over for investors, and is indicating that he believes the bull market will end sometime this year.