BlackRock Inc. (NYSE: BLK) chief Larry Fink has joined in on the theme that it is time to exit long-term bonds. His thesis is mainly the same that you have been hearing from other strategists in a “great rotation” away from longer duration bonds, although he is not calling the rotation one that will only go straight into stocks.
In a Bloomberg TV interview Fink urged investors to go into bond funds that are unconstrained by duration. This gives the managers the ability to only invest in short duration or intermediate bond duration if they feel there is too much risk out in the longer end of the yield curve.
On the equity side of the equation, Fink expects that second-quarter earnings will come in with a positive bias, despite a continued rise in interest rates. Fortunately, inflation also is expected to be muted, and he expects improvements in employment and in the economy.
One interesting thought that Fink brought up today was a decrease in the supply from the Treasury Department. While this may be seasonal, Fink said that a drop of 20% to as much as 30% in Treasury issuance in the coming weeks would not be a surprise to him.
Top Gaining Stocks
Top Losing Stocks