On Thursday, after the release of some worrying US economic data, US Treasury bonds and stocks plummeted, and Bill Gross made some suggestions to investors: “Stick to value stocks and avoid tech stocks for the time being.”
The former king of bonds wrote on social media platform X that if investors had to get involved in technology companies, they should buy Microsoft Corp. (Microsoft Corp.) shares. He also quoted Don McLean (Don McLean)'s hit 1971 song “American Pie” (American Pie).
At the time of these recommendations, technology stocks that make up the S&P 500 Index (S&P 500 Index) were experiencing their worst month since September last year, falling by more than 6.5% in April, dragging major stock indexes lower. In contrast, Vanguard Value ETFs, which include Berkshire Hathaway Inc. (Berkshire Hathaway Inc.) and General Motors Co. (General Motors Co.), fell by about 3.5% during the same period.
In this article, which begins with “The Day the Music Done,” Gross said that the yield on the benchmark 10-year US Treasury “is moving towards 4.75%,” not far from the peak of 4.74%, the highest level this year hit on Thursday.
“Why hold bonds? The post wrote and stated that the US Treasury yield was 5.25%. Gross is the co-founder and former chief investment officer of Pacific Investment Management.
Gross said one of his favorite deals — pipeline master limited partnerships (pipeline master limited partnerships) — is gaining momentum, but investors should not “over increase their holdings.”
MLP is traded on exchanges, focuses on natural resources such as oil and gas, and provides higher yields and tax advantages. The investor said he owns Western Midstream Partners LP and MPLX LP, and emphasized the two companies' high dividends.
The S&P 500 index fell 1.6% on Thursday after a report showed that US economic growth slowed in the last quarter, inflation increased, and Meta platform did not perform well. Traders have also lowered their expectations about when the Federal Reserve (Federal Reserve) will cut interest rates, which have now completely absorbed the expectations that the Federal Reserve will cut interest rates for the first time in December.