Even as the dollar soars higher, some disappointing economic data points to a near-term correction. What does it mean for the bull market? Liz Ann Sonders of Schwab offers a forecast. If you’ve been worried about the impact of a possible interest rate hike on your bond holdings, Jeffrey Gundlach may have some reassuring advice. The chief investment officer of DoubleLine Capital says that even if the Fed raises short-term interest rates, longer-term bond investors won’t face a decline in prices. Elsewhere in the financial community, there’s a possible rule change which could alter the way many stock brokers do business. Whereas Registered Investment Advisors must act as fiduciaries, putting their client’s interests ahead of their own, this rule hasn’t applied to stock brokers. Since stock brokers profit from selling particular financial products to consumers, the government believes there’s a potential conflict of interest that needs to be resolved. BloombergBusiness looks at the proposal.
Will Dipping Data Lead To Dramatic Drop?- US stocks have been relatively resilient in the face of some disappointing economic data. Liz Ann Sonders and her team at Schwab believe the longer-term bull market remains intact but the risks of a near-term correction seem elevated. But the weakness in some economic indicators and earnings is not likely due to heightened recession risk, given still-strong leading indicators. Read more…
Gundlach – Don’t Bet on Higher Rates– Even if the Fed raises short-term interest rates as many expect, longer-term bond investors won’t face a decline in prices, according to Jeffrey Gundlach of DoubleLine Capital. Indeed, the market may have already priced in the effect of rate hikes, he said. He believes rising interest rates for longer-term bonds will not happen for three to four years. Read more…
A Split Over Protecting Investors– The Obama administration wants the Department of Labor, which oversees employee savings plans such as 401(k)s, to propose sweeping regulations that would curb conflicts of interest among brokers who handle investments for people saving for retirement. As it currently stands, stock brokers may call themselves Financial Advisors even though they have a vested interest in selling certain investments to clients. Registered Investment Advisors, on the other hand, are held to a fiduciary standard which means the client’s interests must come first. In the midst of this conflict of interest stands the SEC. Which way will they go with the proposed rule change? Read more…
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John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller