“Buy High and Hope for the Best”
$DIA, $SPY, $QQQ, $VXX
The US stock markets are at their highest risk levels since before the Y 2008 financial crisis because investors are paying a high price for the chances they are taking, says Bill Gross, 73 anni, manager of the $2-B Janus Henderson Global Unconstrained Bond Fund.
“Instead of buying low and selling high, people are buying high and crossing their fingers, hoping for the best,” Mr. Gross, 73, said Wednesday at the Bloomberg Invest New York summit.
Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, he said.
The US economy is expected to grow 2.2% this year and 2.3% in Y 2018, according to some forecast. The Trump Administration officials say their policies will boost annual growth to 3%. The Atlanta Fed says 3.8%
Despite being concerned about high asset prices, Mr. Gross said he feels required to stay invested and sees value in some closed-end funds.
Mr. Gross’s fund has returned 3.1% YTD, outperforming 22% of its peers. It has posted a total return of 5.4% since Gross took over management in October 2014.
”If there’s a common factor it is the expansion of credit,” Mr. Gross said on TV Wednesday. “And the credit that’s being generated by central banks. Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced.”
Mr. Gross said in the current environment “you basically tell your investors that it’s a changed world, that returns are going to be lower and that if you want to sleep at night, to accept the market as it is. Low volatility requires low returns.”
Wednesday, the US major stock market indexes finished at: DJIA +37.46 at 21173.69, NAS Comp +22.32 at 6297.36, S&P 500 +3.81 at 2433.14
Volume: Trade on the NYSE was moderate with 884.1-M/shares exchanged.
- NAS Comp +16.6% YTD
- S&P 500 +8.5% YTD
- DJIA +7.0% YTD
- Russell 2000 +2.8% YTD
|HeffX-LTN Analysis for DIA:||Overall||Short||Intermediate||Long|
|Bullish (0.36)||Bullish (0.27)||Bullish (0.29)||Very Bullish (0.51)|
|HeffX-LTN Analysis for SPY:||Overall||Short||Intermediate||Long|
|Bullish (0.30)||Bullish (0.27)||Bullish (0.29)||Bullish (0.33)|
|HeffX-LTN Analysis for QQQ:||Overall||Short||Intermediate||Long|
|Very Bullish (0.60)||Very Bullish (0.65)||Very Bullish (0.56)||Very Bullish (0.58)|
|HeffX-LTN Analysis for VXX:||Overall||Short||Intermediate||Long|
|Bearish (-0.27)||Bearish (-0.26)||Bearish (-0.27)||Bearish (-0.29)|
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