Latest news with #BillGross
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2 days ago
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Legendary fund manager issues stock market prediction as S&P 500 tests all-time highs
Legendary fund manager issues stock market prediction as S&P 500 tests all-time highs originally appeared on TheStreet. It's been a remarkable ride since President Donald Trump announced widespread tariffs on April 2. Trump's so-called 'Liberation Day' announcement included harsher tariff rates than hoped, forcing investors to rethink their expectations for the U.S. economy. There's evidence that a U.S. economic slowdown is underway, and despite tariff negotiations, tariffs could still push the economy into stagflation or recession. The economic risk raises questions over what's likely to happen to stocks, which usually perform best when a humming economy fattens wallets, allowing households and businesses to ramp up spending. The post-Liberation Day stock market drop lopped 19% and 24% off the S&P 500 and Nasdaq Composite, respectively, from all-time highs in decline was concerning, but "buy the dip" investors took advantage, boosting buys into extremely negative sentiment with most measures flashing "oversold." Since April 9, when President Trump paused most reciprocal tariffs that had been announced on April 2, the S&P 500 and Nasdaq 100 have rocketed higher, gaining 22% and 30%. The returns have been so significant that major market indexes, including the benchmark S&P 500, are flirting with all-time highs again, prompting veteran Wall Street bond manager Bill Gross to chime in with an updated outlook. Gross has been navigating good and bad markets since 1971. He is the co-founder of Pacific Investment Management Co., or PIMCO, a Goliath money manager with $2 trillion under management. His former role atop the $270 billion PIMCO Total Return Fund earned him the 'Bond King' moniker before he left to join Janus Henderson Investors from 2014 to 2019. Given his long track record, investors may want to pay attention to what he's thinking happens next. Many are debating what may happen to the economy next. Some believe that tariffs will tax already cash-strapped consumers later this year, slowing economic activity, as businesses also crimp spending awaiting trade deal insight. Others think tariff risks are fleeting and overblown. The jobs market remains healthy, given that unemployment is relatively low at 4.2%. However, the unemployment rate was 3.4% in 2023, and companies have announced over 696,000 layoffs this year, including 93,816 job cuts in May, up 47% year over year, according to Challenger, Grey, & weakening jobs market prompted the Federal Reserve to cut interest rates by 1% last year; however, it has since gone to the sidelines, pausing further cuts, over fear that more reductions could fuel inflation, particularly given that the tariff impact is only beginning to be felt by consumers and businesses. The dilly-dallying on monetary policy has prompted sharp criticism, though, including from the White House. Ostensibly, recognizing that tariffs may slow GDP and worsen unemployment, President Trump has threatened to fire Fed Chair Jerome Powell, and his Director of the Federal Housing Finance Agency, William (Bill) Pulte, has called for his resignation. If the economy cools and the Fed is unwilling to budge on interest rates, Congress may not be able to help, given that the country's huge deficit and mountain of debt are impacting fiscal policy. America's deficit exceeds $1.8 trillion, accounting for 6.4% of gross domestic product. At the same time, total public debt outstanding is roughly 122% of GDP, far higher than its 75% level in 2008 during the Great Recession. The economic backdrop threatens earnings growth, but the stock market has so far looked beyond the risks, assuming that trade negotiations will bear fruit, inflation expectations will retreat, and corporate earnings will continue growing, rather than ratchet lower. The fact that Bill Gross has been tracking Wall Street for over 50 years means he's seen plenty of stock market pops and drops, including the Nifty 50, skyrocketing inflation in the 1970s, the S&L crisis in the late 80s and early 90s, the Internet boom and bust, the Great Recession, Covid, and the 2002 bear market. More Experts Fed official sends strong message about interest-rate cuts Billionaire fund manager sends surprising message on trade deficit Hedge-fund manager sees U.S. becoming Greece In short, Gross has been-there, done-that, so his take on markets is worth paying attention to. He doesn't see much reason to be a buyer of US Treasuries. Many turn to Treasuries as a safe haven amid economic or geopolitical worry. Given the economic risks listed above, the ongoing Russia/Ukraine War, and a dust-up in the Middle East, we certainly have that. Yet, Treasury yields haven't made much progress lower (remember yields fall when bond prices rise and vice versa). Gross doesn't think there's much incentive for them to fall much further. "Long-term research indicates US 10 year has traded at CPI plus 175," wrote Gross on X. "With inflation at 2.5% that puts a 10 year at 4.25% or so. That was history — but deficits/ensuing supply of bonds/and a weak dollar should keep CPI from falling below 2.5% and the 10-year from falling below 4.25%." The 10-year Treasury note yield is currently 4.29%. As a result, he predicts a "little bear market for bonds." With little incentive to shift portfolios towards Treasuries for gains, what does that mean for stocks? "Stocks are AI-dominated and continue to suggest 1-2% economic growth despite tariffs and geopolitical unrest," wrote Gross. "I suggest a 'little bull market' for stocks." Undeniably, artificial intelligence stocks continue to win favor with investors as companies big and small look for ways to exploit it for profit growth. After a pause earlier this year, technology stocks have turned it on lately. The SPDR Technology ETF () is up about 8% in June alone, and unlike the S&P 500, it has already notched a new all-time high. That said, don't get too excited. Gross doesn't seem to expect much more upside than we've already witnessed. "Nothing dramatic either way for now," concluded fund manager issues stock market prediction as S&P 500 tests all-time highs first appeared on TheStreet on Jun 25, 2025 This story was originally reported by TheStreet on Jun 25, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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2 days ago
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Why the tech trade has more room to run even as the Nasdaq 100 hovers at all-time highs
UBS said investors should stick with tech even as the sector barrels past all-time highs. In the bank's view, AI adoption is still in its early stages and the boom will carry tech higher. "Accelerating AI use is set to drive further monetization across industries," UBS says. The Nasdaq 100 reached a new peak this week, but there's no reason to expect the booming tech trade to take a breath, UBS wrote this week. As President Donald Trump announced a ceasefire agreement between Israel and Iran, the tech-heavy index coasted to a record closing high on Tuesday. The Nasdaq's recent gains have been propelled by rallies in top chip makers like Advanced Micro Devices, Broadcom, and Nvidia, three artificial intelligence leaders that have spent the last month moving steadily higher. These companies' ability to withstand volatile market conditions and continue making progress has caught the attention of top commentators. Investor and former Pimco exec Bill Gross recently predicted a "little bull market" for stocks, citing the dominance of the AI market. Now, UBS says investors should stick with the tech trade, as the AI party is still just kicking off and AI adoption is accelerating. Citing data from a recent Census Bureau survey on the use of AI in the workplace, UBS said use of the technology is rising steadily. "AI adoption rates rose to 9.2% in the second quarter of this year, from 7.4% in the previous three-month period and 5.7% in the December 2024 quarter," states the report. "This means AI adoption is likely to soon cross the 10% threshold that took US e-commerce 24 years to reach." UBS highlights the example of Amazon Q, a virtual assistant powered by generative AI that is reportedly "saving around USD 260mn every year through coding assistants." It also notes that 20%-30% of Microsoft's coding is completed by AI and that PayPal uses AI to handle 80% of its customer service interactions. In addition, the report highlights the benefits of utilizing AI in healthcare. Its authors note that it has proven highly effective in areas such as detecting abnormal tissues that might have previously been overlooked. All of this suggests that AI adoption is likely to increase in the near future, paving the way for the sector's leading stocks to continue rising. "We believe a peak in overall AI adoption is still a long way off, and accelerating AI use is set to drive further monetization across industries," UBS states. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
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Why the tech trade has more room to run even as the Nasdaq 100 hovers at all-time highs
UBS said investors should stick with tech even as the sector barrels past all-time highs. In the bank's view, AI adoption is still in its early stages and the boom will carry tech higher. "Accelerating AI use is set to drive further monetization across industries," UBS says. The Nasdaq 100 reached a new peak this week, but there's no reason to expect the booming tech trade to take a breath, UBS wrote this week. As President Donald Trump announced a ceasefire agreement between Israel and Iran, the tech-heavy index coasted to a record closing high on Tuesday. The Nasdaq's recent gains have been propelled by rallies in top chip makers like Advanced Micro Devices, Broadcom, and Nvidia, three artificial intelligence leaders that have spent the last month moving steadily higher. These companies' ability to withstand volatile market conditions and continue making progress has caught the attention of top commentators. Investor and former Pimco exec Bill Gross recently predicted a "little bull market" for stocks, citing the dominance of the AI market. Now, UBS says investors should stick with the tech trade, as the AI party is still just kicking off and AI adoption is accelerating. Citing data from a recent Census Bureau survey on the use of AI in the workplace, UBS said use of the technology is rising steadily. "AI adoption rates rose to 9.2% in the second quarter of this year, from 7.4% in the previous three-month period and 5.7% in the December 2024 quarter," states the report. "This means AI adoption is likely to soon cross the 10% threshold that took US e-commerce 24 years to reach." UBS highlights the example of Amazon Q, a virtual assistant powered by generative AI that is reportedly "saving around USD 260mn every year through coding assistants." It also notes that 20%-30% of Microsoft's coding is completed by AI and that PayPal uses AI to handle 80% of its customer service interactions. In addition, the report highlights the benefits of utilizing AI in healthcare. Its authors note that it has proven highly effective in areas such as detecting abnormal tissues that might have previously been overlooked. All of this suggests that AI adoption is likely to increase in the near future, paving the way for the sector's leading stocks to continue rising. "We believe a peak in overall AI adoption is still a long way off, and accelerating AI use is set to drive further monetization across industries," UBS states. Read the original article on Business Insider
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3 days ago
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Buy stocks, sell bonds: How billionaire investor Bill Gross says investors should play an unpredictable market
Bond King Bill Gross says he's not very bullish on Treasurys. Gross is more optimistic about stocks, eyeing a "little bull market." He thinks the 10-year Treasury yield will struggle to fall much further from current levels. Billionaire investor and former Pimco co-founder Bill Gross has a cautious outlook on the bond market, but see continued strength ahead for stocks. The "Bond King" shared his take on both markets this week in a post on X, predicting a "little bull market" for stocks and a "little bear market" for bonds. In his view, the 10-year Treasury yield isn't likely to dip below 4.25% soon, highlighting inflationary trends and deficit concerns. The yield on Tuesday was up slightly by about one basis point to 4.31%. Gross sees more strength in the equity markets and maintains that stocks are likely to continue rising. He cites support from the tech sector, specifically artificial intelligence companies, as a likely growth driver. Tech stocks are enjoying continued momentum, with the Nasdaq 100 index closing at a record high on Tuesday as markets cheered the Israel-Iran ceasfire. Major chip companies with high AI exposure, such as Nvidia, Advanced Micro Devices, and Broadcom, have all trended upward despite the high uncertainty generated by geopolitics in recent weeks. Gross's thesis is for AI to support economic growth of 1%-2%. Regarding bonds, he said "deficits/ensuing supply of bonds/and a weak dollar should keep CPI from falling below 2.5% and the 10 year from falling below 4.25%." As Treasurys are a lending benchmark for many consumer products, Gross's predictions for yields to remain elevated could complicate plans for everyday Americans. If yields remain stubbornly high, homebuyers looking for lower mortgage rates could be disappointed. Despite the unpredictable nature of the current economy, Gross adds that for now, he doesn't see anything "too dramatic" happening in either the stock or bond market. Read the original article on Business Insider Sign in to access your portfolio
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3 days ago
- Business
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Buy stocks, sell bonds: How billionaire investor Bill Gross says investors should play an unpredictable market
Bond King Bill Gross says he's not very bullish on Treasurys. Gross is more optimistic about stocks, eyeing a "little bull market." He thinks the 10-year Treasury yield will struggle to fall much further from current levels. Billionaire investor and former Pimco co-founder Bill Gross has a cautious outlook on the bond market, but see continued strength ahead for stocks. The "Bond King" shared his take on both markets this week in a post on X, predicting a "little bull market" for stocks and a "little bear market" for bonds. In his view, the 10-year Treasury yield isn't likely to dip below 4.25% soon, highlighting inflationary trends and deficit concerns. The yield on Tuesday was up slightly by about one basis point to 4.31%. Gross sees more strength in the equity markets and maintains that stocks are likely to continue rising. He cites support from the tech sector, specifically artificial intelligence companies, as a likely growth driver. Tech stocks are enjoying continued momentum, with the Nasdaq 100 index closing at a record high on Tuesday as markets cheered the Israel-Iran ceasfire. Major chip companies with high AI exposure, such as Nvidia, Advanced Micro Devices, and Broadcom, have all trended upward despite the high uncertainty generated by geopolitics in recent weeks. Gross's thesis is for AI to support economic growth of 1%-2%. Regarding bonds, he said "deficits/ensuing supply of bonds/and a weak dollar should keep CPI from falling below 2.5% and the 10 year from falling below 4.25%." As Treasurys are a lending benchmark for many consumer products, Gross's predictions for yields to remain elevated could complicate plans for everyday Americans. If yields remain stubbornly high, homebuyers looking for lower mortgage rates could be disappointed. Despite the unpredictable nature of the current economy, Gross adds that for now, he doesn't see anything "too dramatic" happening in either the stock or bond market. Read the original article on Business Insider Sign in to access your portfolio
