If you have any doubts about the buying today in stocks — and some clearly do, because the Dow has retreated from an almost 100-point gain to a brief loss in the double digits, and is now hanging onto a slim 4-point rise 10,072 — you might want to listen in to Pimco’s CEO Mohamed El-Erian and founder Bill Gross, who appeared in a rare combo interview on CNBC.
“The green for bonds and the red for stocks” is the true direction, said Gross. He cited signs of slower growth globally, with Europe being restrictive in fiscal policies, pushing it toward recession. “Bonds are catching a bid as yields go down with signs of lower inflation.”
On the positive side, El-Erian said he thinks it’s still a “low probability” that the U.S. goes into a double-dip, despite the absence of growth drivers. “We will remain vulnerable,” said El-Erian.
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