Jeff Gundlach recommends this trade for when the Fed finally hikes rates
Jeff Gundlach discusses what to do when rates rise (Think Advisor)
Bond guru Jeff Gundlach of DoubleLine participated in a webinar, "The Road Ahead: What's Next for Fixed Income," along with James Ross, global head of SPDR Exchange Traded Funds. Think Advisor reports Gundlach told advisors to take on more interest rate risk and less credit risk if they believe the Fed is going to raise rates in December. Specifically, Gundlach suggested to buy long-dated Treasuries and sell high-yield bonds. "The long bond wants the Fed to tighten," Gundlach noted. However, Gundlach personally believes the Fed won't hike this year. He pointed to weak inflation data, US GDP, junk bond prices and unfavorable emerging market conditions for reasons he believes the Fed will remain on hold into 2016. Currently, traders are projecting a 63.6% probability for a March rate hike.
Lloyd Blankfein has "highly curable" lymphoma (Business Insider)
Goldman Sachs CEO Lloyd Blankfein has "highly curable" lymphoma, according to a statement released on the firm's website. Blankfein will continue to lead the firm, but will cut back on travel and public appearances as he undergoes chemotherapy. Business Insider's Portia Crowe reports COO Gary Cohn will be making more public appearances in the interim.
Pimco is still feeling the effects of Bill Gross' departure (Investment News)
Pimco's assets under management fell to $1.15 trillion at the end of June, down 21% since Bill Gross departed the firm 10 months prior. Investment News says outflows are expected to have continued in the third quarter as both July ($2.5 billion) and August ($1.8 billion) saw investors pull their money from the firm's flagship Total Return Bond Fund. A similar fund, the Total Return Fund, saw AUM decline by 44%, from the start of October 2014 until the end of June 2015, to $182 billion, according to Investment News.
The new Obamacare numbers are out (Reuters)
Reuters reports data from the US Department of Health and Human Services shows 17.6 million Americans are now covered under the Affordable Care Act. This is well ahead of the March estimate of 16.4 million Americans. In a speech, HHS Secretary Sylvia Burwell said the number of uninsured Americans has fallen for three reasons. She attributed the decline to young people being allowed to stay on their parents' insurance plans longer, the expansion of Medicaid and individuals being allowed to purchase subsidized health insurance, Reuters says.
FINRA fines fell in the first half of 2015 (Financial Planning)
A study released by the law firm Sutherland, Asbill & Brennan has found fines against the financial services industry are down 12.5%, compared to last year, to $37.5 million. "I think because we are a few years removed from the market crisis or the great recession, FINRA is focusing more on bread-and-butter type issues," Brian Rubin, head of the firm's Washington litigation practice and one of the study's authors, told Financial Planning. The firm concluded despite the drop in total fines, the amount of "supersized fines" are ticking higher. There have been six fines in excess of $1 million so far in 2015, bringing in a total of $17.8 million. That number is up from two in 2013 and five in 2014, according to the study.