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 […]