NEW YORK Guggenheim Partners global chief investment officer Scott Minerd warned on Tuesday the firm's recession forecast model showed a 58% chance of the economy being in a recession by mid-2020, and a 77% chance of one beginning in the next 24 months.
NEW YORK Three names dominate the U.S. world of bond investing - Jeffrey Gundlach, Dan Ivascyn and Scott Minerd. But funds run by these star investors are lagging their respective benchmarks this year.
The bond market is in a "bubble," particularly sovereign debt, Guggenheim Partners global chief investment officer Scott Minerd warned on Thursday, and he said that efforts by the Federal Reserve to head off a recession by cutting interest rates will ultimately prove futile.
The Federal Reserve has lost control of interest rates as evidenced by the federal funds rate trading higher than any part of the U.S. Treasury yield curve, Jeffrey Gundlach, the chief executive of DoubleLine Capital, said on Tuesday.
NEW YORK The massive rally in Treasuries has whipsawed the biggest name in the bond world.
By Jennifer Ablan
Aug 15 Investors rushed into their favorite
safe-haven assets such as Treasuries, investment-grade corporate
bonds and money market funds in the latest week, which was
marked by rising tensions over the U.S.-China trade war and the
global economic slowdown.
U.S.-based money-market funds attracted roughly $10.6
billion in the week ended Wednesday, the second straight week of
inflows, according to Refinitiv's Lipper. U.S.-based
investment-grade corporate bond funds attracted more than $4
billion and U.S.-based government and Treasury funds attracted
more than $2 billion, Lipper data showed.
Stocks plunged on Wednesday in the Dow Jones Industrial
Average's worst performance of 2019 - 800.49 points or 3.05% to
25,479.42 after the bond market flashed a worrying signal about
the U.S. economy.
"Money went into safe havens, which is what you would expect
after yesterday, but this is the continuation of long-term
trends," said Pat Keon, senior research analyst at Lipper.
Taxable bond funds took in net new money totaling more than
$5.8 billion for the 11th week in 12, Keon said. Equity mutual
funds extended their losing streak to 26 straight net outflows
at negative $4.6 billion, he said.
"Equity ETFs, an asset group where we’ve seen some
week-to-week variation between net inflows and net outflows did
the opposite of what you would expect from the markets and had
net inflows of $7.7 billion," Keon said. The SPDR S&P 500 ETF
Trust and the Invesco QQQ Trust Series 1 "paved
the way here" with net inflows of $5.9 billion and $2.9 billion,
respectively, he said.
All told, Keon said "What stands out to me is I don’t see
any reaction to yesterday's market turmoil in the flows results.
Specifically, I would have expected to see net outflows from
equity ETFs and maybe a larger net inflow into money markets."
The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
Sector Flow Chg % Assets Assets Count
All Equity Funds 3.101 0.04 6,958.321 11,726
Domestic Equities 4.459 0.09 5,004.499 8,327
Non-Domestic -1.357 -0.07 1,953.822 3,399
All Taxable Bond 5.756 0.19 2,986.518 5,839
All Money Market 10.587 0.33 3,229.220 1,014
All Municipal 1.625 0.33 493.511 1,343
(Reporting by Jennifer Ablan; Editing by Grant McCool and Chris
Jeffrey Gundlach, chief executive of DoubleLine Capital, warned on Wednesday that rate cuts by the U.S. Federal Reserve were not going to stop a recession from happening and that "once the Fed is in easing mode, it is already too late."
U.S.-based high-yield junk bond funds posted more than $4 billion of outflows in the week ended Wednesday, the largest weekly cash withdrawals since October 2018, according to Refinitiv's Lipper data, triggered by an escalating trade war between China and the United States.