Bill Gross says he’s buying futures tied to the Secured Overnight Financing Rate and sees a recession in the fourth quarter.
Posting on X on Monday, Gross said he expects the gap between two- and 10-year yields as well as the difference between two- and five-year yields to go positive before year end.
Regional bank carnage and recent rise in auto delinquencies to long-term historical highs indicate U.S. economy slowing significantly.
— Bill Gross (@real_bill_gross) October 23, 2023
Recession in 4th quarter.
Best investments are equity arbs (CPRI and SGEN. VMW a long shot). I’m seriously considering regional banks again. 1/2
Regional bank turbulence and the rise in auto-loan delinquencies suggest a significant slowdown in the US economy, he noted.
Maybe next week. Will tweet.
— Bill Gross (@real_bill_gross) October 23, 2023
On bonds. Invest in the curve. Various combinations 2/10, 2/5. Should go positive before year end. I’m buying SFR h5 (SOFR futures). “Higher for longer” is yesterday’s mantra. 2/2
Equity arbitrages would make the “best investment,” Gross said, adding that he was “seriously considering regional banks again.”
This article was provided by Bloomberg News.