Back-Up in Bond Yields Should Not Be a Surprise
Jack Bouroudjian, CEO of Bull and Bear Partners, says everything we see in the fixed income space is all risk and no return.
Data overnight showed that U.S. consumer confidence in May was the strongest in over five years, while home prices in March accelerated by the most in almost seven years.
(Read More: Soaring Consumer Confidence Points to US Resilience)
Fears of a pull-back in easing by the Fed, which resulted in major U.S. indices posting their first negative close since mid-April last week, were eased after the Bank of Japan and the European Central Bank recommitted to keeping monetary policy accommodative on Tuesday.
Those investors who walked away in May are now "running back" into stocks now, because of the strong economic data, Bouroudjian said.
"What the market is telling us now is that they understand that the Fed and all of these central banks are in a concerted effort and guess what it's working - the numbers are telling us that it's working and if that continues then we can't fight the trend," Bouroudjian added.
Monetary stimulus has supported the benchmark S&P 500 to rise nearly 17 percent this year, while the Dow is higher almost 15 percent in the same time period.
(Read More: Don't Expect Bernanke to Talk Taper...Yet, Economist Says)
Richard Harris, chief executive of Port Shelter Investment Management, said expect global equity markets, especially Asia to catch up with U.S. gains.
"We've probably seen the big gains in the U.S., quite a lot of the gains in Europe, but I don't think we've quite seen the gains in Asia yet, and that's where I think the opportunities are perhaps in the next three to six months," Harris said.
The MSCI Asia index, excluding Japan, is only up 0.3 percent so far this year, lagging U.S. markets.
Joe Magyer, senior analyst at financial services firm Motley Fool, meanwhile, added that while all stocks will not be winners "bonds are the last place I'd want to be for the next five years."
— By CNBC.com's Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu
29 May, 2013
-
Source: http://www.cnbc.com/id/100771578
--
Manage subscription | Powered by rssforward.com
