Then he started playing brass. Its preferred market sector: natural gas pipelines, whose yields are estimated to range from 9% to 12% for investment quality shares with certain tax advantages. That’s also why he suggests investors take a look at it Magellan Midstream Partners (MMP), BP Midstream Partners (BPMP) i Product partners for companies (EPD).
Growth stocks, particularly the biggest IPOs of 2020, including Snowflake, Airbnb and Doordash, will struggle to live up to expectations of what Gross calls “Robinhoods for the day,” he added. The same goes for SPACs or special acquisition companies and the “2020 Teslas”.
“This market is driven (yes) by intense speculation, but also by the corporate profits driven by the central bank, fiscally financial, which when discounted to the current value almost zero nominal and, in many cases, negative real interest rates, produce record stock prices, ”Gross said.
He attributes his downside potential to the Federal Reserve’s commitment to keeping interest rates near zero for years.
“Much of the market appreciation in the last two years, especially for growth stocks, has been due to the decline in real interest rates,” Gross said. A rally that will only continue if real returns remain “substantially negative,” he continued.
On a broader note, the investment legend warned of the scar impact of the coronavirus on the economy, along with a stock market with the help of the Fed and fiscal stimulus, which could begin to reflect the stock markets of the coronavirus. Nordic and European countries. It is a cause for concern for Gross, who cites that the two markets in these countries operate at a lower price-to-profit ratio than new IPOs and stocks like Microsoft currently listed on Wall Street.
“How many tax packages can the stock market bear before it realizes that GDP is now opioid, depending on more and more Washington dollars that turn our Republican capitalist supply monster into a“ gasp! “” Evidence of this, it seems to me, requires that unemployment return to pre-emptive levels. Fed Chairman Jerome Powell has said so much, but we are far, far from it, “Gross said.
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