Tags: Blain | bond | stock | market

Strategist Blain: 'Get Out of Bonds and Into Stocks'

By    |   Tuesday, 17 February 2015 01:20 PM

The global economy is beginning to show stronger-than-expected growth, and that's bad news for bonds, says Bill Blain, senior fixed income strategist at Mint Partners, a unit of BGC Partners.

"As a bond man, I've got to say get out of bonds and into stocks, and believe me that was a painful thing to say," he told CNBC.

Blain expects growth to heat up in Europe, the United States and China. "We're going to see a global GDP surprise." That's when stocks really rise, Blain said.

The U.S. economy grew 2.4 percent last year, and many analysts expect an expansion of about 3 percent this year.

Meanwhile, the U.S. bond market already has slumped in recent sessions, with the 10-year Treasury yield now at 2.10 percent, up from a 20-month low of 1.65 percent just two weeks ago.

"It very much looks to me that bonds are fully priced. We have something like 40 percent of the developed world's bonds trading with negative yields," Blain said. "Why would you want to invest in negative yields in the credit market?"

The 10-year German government bond now yields 0.34 percent and Japan's 0.39 percent.

David Rosenberg, chief economist at Gluskin Sheff + Associates, apparently thinks global bonds are overvalued as well — and the U.S. dollar too.

"Make no mistake: bonds are already priced for the world to come to an end, and the world is not coming to an end," he said, according to the Financial Post.

"And looking at the massive net speculative dollar long positions on the InterContinental Exchange, the bull view on the greenback is arguably the most crowded trade there is across the planet."

The dollar has risen to multi-year highs against a range of currencies in recent weeks.

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The global economy is beginning to show stronger-than-expected growth, and that's bad news for bonds, says Bill Blain, senior fixed income strategist at Mint Partners, a unit of BGC Partners.
Blain, bond, stock, market
293
2015-20-17
Tuesday, 17 February 2015 01:20 PM
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