Source: Golden Ten Data
“Old Debtors” shouted: US regional banks have bottomed out! But some of the data doesn't seem to support this statement...
Bill Gross, co-founder and former chief investment director of Pacific Investment Management Company (PIMCO), known as the “old debt king,” believes,”Regional banks in the US have bottomed out”, This shows that investing in regional banks is no longer dangerous. This is different from his recent statement, where he said he would like to wait a little longer to buy again.
The “old debt tycoon” revealed that it is in the process of buying$Truist Financial (TFC.US)$,$Citizens Financial (CFG.US)$,$KeyCorp (KEY.US)$with$First Horizon National (FHN.US)$.
On October 30, Gross saidRegional banks have “extraordinary long-term value”However, he wants to hold some of these bank shares at 60% book value and 7% yield. A week ago, he said heThe US is expected to fall into recession in the fourth quarter.
Gross added in his latest review that in the “uncertain” US bond yield situation, the best strategy for traders is to “invest in the continuously inverted 2-year and 10-year US Treasury yield curves”, that is, buy 2-year US bonds and sell 10-year US bonds, and expects the curve to turn positive in the next six months.
However, it is worth noting that,US money market funds experienced capital inflows for the second week in a row,The scale has jumped 62.7 billion US dollars and has returned to near an all-time high of about 5.7 trillion US dollars.
The capital inflow from institutional funds was even more impressive, at 38.2 billion US dollars, but retail funds also received an impressive capital inflow of 24.5 billion US dollars.There has been no outflow of retail funds from money market funds since April.
Furthermore,The emergency financing instruments provided by the Federal Reserve to banks once again rose to a record high of more than $109 billion.
The market value of the US stock market has fallen back to normal levels, andRe-linked to the level of bank reserves of the Federal Reserve, temporarily regaining its relevance over the years.
Finally, the financial blogger Zero Hedge warned that Gross apparently “predicted the bottom of regional banks,” and that the US regional bank stock prices he proposed have unquestionably risen, but what is very alarming is thatSince the collapse of the Silicon Valley Bank, US bond yields have risen sharply. He concluded:
“Regional banks are still borrowing more than $109 billion from the Federal Reserve at high interest rates to fill gaps in their balance sheets. Does this sound like the bottom has been formed?”
Editor/Somer