Wall Street Webcasting presents exclusive video of Rich Gordon, the highly regarded Fixed Income Market Strategist of Wells Fargo Securities (NYSE: WFC). As treasury yields reach an inflection point, Gordon analyzes the bullish versus bearish arguments over bonds.
The bullish argument for treasury yields is that the economic growth in the US has been persistently slow, and if it were to deteriorate further, Gordon expects additional bond purchases. Also, Europe’s issues are still not resolved, which may keep investors purchasing more bonds rather than stocks. Lastly, bank deposits are currently outweighing bank loans, making bank demand strong and bonds more appealing.
The bearish argument sits on sector rotation. Recent data is implying that institutional money is shifting from treasuries into stocks. Furthermore, even though banks are currently strong, ECB action could be enough to provoke investors to withdrawal out of treasuries. Finally, Gordon points out, “The move higher in yields the last four weeks has brought several support levels into play.”
Which side is Gordon on? Tune in, to find out.
Please visit the following link to view the video: