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Stein: U.S. Treasuries Will Continue to Rally

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  • Description

    Eaton Vance Portfolio Manager Eric Stein gives his outlook for the Treasury market.

  • Duration 2:59
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-- you to Hewlett and -- -- we'll be -- canceled a whole lot again.

Lot of it for dollars in Japan is likely to use those dollars to buy US treasuries so big reason we're seeing that bump up in the dollar rise in treasuries today but for the month of October treasuries.

Of all maturities are down nearly one and a half percent.

So treasuries are considered among the safest investments are people feeling more or less risky joining us now as Eric Stein -- -- manager Eaton -- welcome back so Eric thanks -- seems investors change their investment comfort zone on a daily basis going on.

By -- September really ultimate kind of risk off mode October's been the risk on mode stock market's up treasuries down credit spreads tighter.

And so it just -- back and forth we're going from kind of fear to greed and back again and it's -- driven market -- today we got news at MF global bankruptcy in addition to -- Japanese intervention so I -- do expect more of the -- -- and has -- translate your outlook for -- -- the ten years -- benchmark yeah I think this we're gonna it's gonna be back and forth -- we see you know more problems in Western Europe which we we beaten cancer growing at its and you see pressure in Western Europe.

You'll see the treasury rally we get a little better economic news here in the US has its kind of picked up over the past month or so treasury yields should go -- so.

-- from the long term perspective you don't like US treasuries in the short term they're definitely a flight to quality asset and will they continue to be especially as the of the super committee meeting on the US budget deficit reduction measures in this -- perhaps another US credit.

I downgrading look at that mean because it was interesting the reaction first and it happened that people flooded US treasury is that correct so I don't know one -- the only countries in the world we can have a downgrade.

-- have a whole debacle with the debt ceiling and treasuries rallied massively because treasures are you know US dollar as a reserve currency treasures are considered you know flight to quality safe asset.

Bad things happen in the world including US downgrade you get treasuries as a rally and I think we'll continue to see that -- short term short term you like treasury some more actionable information here for us out.

You like gas for value and the Malaysian ringgit speak -- -- a lot of stuff a lot of the incorporate high yield stuff is where a lot of people are investing right up at some new ones.

He he had slowed in the way we think you know any -- we think emerging market currencies are better than the dollar the Euro or the end.

So one of our -- currencies the Malaysian ringgit you have strong growth they have natural resources.

There interest rates are you know get about 3% in the Malaysian she don't not a lot -- compared to getting 0% on -- US bill.

Getting 3% in the Malaysian ringgit we -- as an attractive place to be invested and creating Chinese currencies as well as well Korean won the Chinese who want it it.

And some of those currencies that are very tough month of September they've bounced back here in October but from a longer term perspective the fundamentals better growth higher interest -- Vs what we have here in the US and basically 0% interest and -- aspects in the US fixed income what do you think still a corporate story I feel -- -- high yield bonds off floating rate bank loans you know those are good places to be get attractive spreads to US economy one of the stronger parts of the US economy is corporate balance sheets corporate balance sheets are in good shape.

You don't need a lot of growth -- -- growth for earnings they have the stock market go up you just need.

Okay earnings and kind of the world not to infer corporate fixed income do OK -- source of -- day here -- how is Fletcher that.

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