Bloomberg Intelligence: Bitcoin Surges Past $60,000
Feb 28, 2024
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Bitcoin surges past $60,000 as experts discuss market outlook. Apple's shift away from electric vehicles impacts EV industry. U.S GDP data and politics analyzed. Insights on fixed income space and market trends. Challenges and future predictions for electric vehicle market. Economic factors, investment strategies, and market valuation concerns explored.
Market anticipates normalization of yield curve and favors longer duration investments.
Upgrade corporate credit portfolios by moving up in quality, avoiding additional risk.
Agency mortgages offer attractive investment option with spread differentials compared to corporate bonds.
Deep dives
Inflation Has Peaked
The bond market has likely reached peak inflation and anticipates a normalization of the yield curve, leading to an inclination towards steepeners and longer duration investments. The market is set up for a modestly higher inflation outcome, but also exhibits signs of complacency and room for surprise in either direction.
Hygrating Portfolios
In terms of corporate credit, the recommendation is to focus on upgrading portfolios by moving up in quality rather than extending along the risk spectrum. Given the current market dynamics, it is advisable to avoid taking on additional risk and opt for higher quality credit positions.
Agency Mortgages Show Attractiveness
Agency mortgages are being viewed as an appealing investment option compared to corporate bonds due to the significant spread differential observed. This type of investment offers the benefit of trading duration risk for credit risk, presenting an attractive opportunity, especially in the current market environment.
Potential Economic Scenarios
There is a consideration for potential scenarios where the economy might experience a productivity-enhanced expansion or a strong AI productivity boom, which could challenge existing investment strategies. Questions revolve around consumer resilience, wage growth sustainability, and the potential for reflation and productivity improvements.
Future Market Outlook
Amidst uncertainty, the current market setup calls for vigilance and active management to navigate various economic possibilities and potential market shifts. While agency mortgages appear favorable, ongoing analysis and adjustments are crucial to align portfolios with prevailing market conditions.
Mike McGlone, Bloomberg Intelligence Senior Commodity Strategist, joins to discuss the latest on Bitcoin. Ann Berry, Founder & Managing Partner at Threadneedle, discusses her outlook for the markets. David Welch, Bloomberg Detroit Bureau Chief, discusses how the sudden demise of Apple’s car program impacts EVs. Henrietta Treyz, Managing Partner and Director of Economic Policy at Veda Partners, joins to discuss U.S GDP data and politics. Jerry Cudzil, Group Managing Director and Generalist Portfolio Manager at TCW, discusses the latest on the fixed income space.