yield curve - What We're Reading - StockBuz2024-03-28T11:30:23Zhttp://stockbuz.ning.com/articles/feed/tag/yield+curveWhat Yield Curve Inversion Is Telling Ushttp://stockbuz.ning.com/articles/what-yield-curve-inversion-is-telling-us2019-05-12T20:44:00.000Z2019-05-12T20:44:00.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><h4>The US yield curve has (almost) inverted, and this has been making headlines for the last couple of months now. This should come as no surprise, as the yield curve is perhaps the most reliable recession indicator out there. But what does an inverted yield curve tell us about future returns? Our analysis shows that while asset class returns in general are somewhat subdued between the first date on which the yield curve inverts and the start of the recession, the inversion of the yield curve is not followed by extraordinary deviations in returns.</h4>
<h4><a href="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg"><img class="alignnone wp-image-3258" src="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=633&h=314" sizes="(max-width: 633px) 100vw, 633px" srcset="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=633&h=314 633w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=1266&h=628 1266w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=150&h=74 150w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=300&h=149 300w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=768&h=380 768w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=1024&h=507 1024w" alt="" width="633" height="314" data-attachment-id="3258" data-permalink="https://jeroenbloklandblog.com/2019/05/08/yield-curve-inversion-recessions-and-asset-class-returns/yc1/#main" data-orig-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg" data-orig-size="1614,799" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="YC1" data-image-description="" data-medium-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=300" data-large-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc1.jpg?w=470" /></a></h4>
<h4><strong>Definition</strong></h4>
<h4>Before moving over to the results of our analysis, we would like to dwell briefly on the definition of the yield curve, and the combination of maturities in particular. In most empirical research, the yield curve is either defined by the differential between the 10-year and 3-month US Treasury yield (10Y-3M), or the 10-year and 2-year US Treasury yield (10Y-2Y). The reasons for preferring one over the other depends on many things, including data availability – the 3-month US Treasury yield has a much longer history;  the degree to which you want to capture short-term versus long-term views on GDP growth and inflation, which is likely to be better reflected in the 2-year yield; and/or forecasting accuracy and timeliness, a point we will get back to later. As noticed by the New York Fed in its study ‘The Yield Curve as a Leading Indicator: Some Practical Issues (2006): “Spreads based on any of the rates mentioned are highly correlated with one another and may be used to predict recessions.” Hence, we will look at both the 10Y-3M and 10Y-2Y inverted yield curves, also because this leads to at least one interesting observation.</h4>
<h4><strong>Inversions and recessions</strong></h4>
<h4><a href="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg"><img class="alignnone wp-image-3256" src="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=667&h=200" sizes="(max-width: 667px) 100vw, 667px" srcset="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=667&h=200 667w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=150&h=45 150w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=300&h=90 300w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=768&h=230 768w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=1024&h=307 1024w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg 1040w" alt="" width="667" height="200" data-attachment-id="3256" data-permalink="https://jeroenbloklandblog.com/2019/05/08/yield-curve-inversion-recessions-and-asset-class-returns/yc3/#main" data-orig-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg" data-orig-size="1040,312" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="YC3" data-image-description="" data-medium-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=300" data-large-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc3.jpg?w=470" /></a></h4>
<h4>As mentioned, the yield curve qualifies as one of the best, if not <em>the</em> best, recession forecasters. For the 10Y-2Y yield curve, we have reliable data covering the last five US recessions, all of which were accurately forecasted well in advance, as shown in the right panel in the table above. The lag between the first ‘inversion date’ and the start of the recession, as determined by the National Bureau of Economic Research (NBER), averages 21 months, ranging from 11 months until the 1981 recession to 34 months until the 2001 recession. The results for the 10Y-3M yield curve, as shown in the left panel in the table above, are highly comparable, with an average lead time of 19 months until the next recession. The data further reveals that prior to the last five recessions, the 10Y-2Y yield curve inverted before the 10M-3M yield curve on each occasion. From this angle, the 10Y-2Y yield curve should be the preferred recession indicator, as it ‘detects’ the next recession first.</h4>
<h4>The available data history for the 10Y-3M yield curve is longer, covering the last seven recessions. We find that the 10Y-3M yield curve correctly predicts these two additional recessions (1970, 1973) as well. However, it also seems to have given a false signal. On 12 January 1966, the 10Y-3M yield curve inverted for six days, but the next recession did not start until January 1970, or four years later. Obviously, the time horizon for which to assign forecasting power is arbitrary, but four years is considerably longer than in other cases. In addition, between early 1967 and December 1968, the 10Y-3M yield curve did not invert once, suggesting that we are looking at a separate period of yield curve inversion. Unfortunately, we can’t compare these inversions with the 10Y-2Y yield curve, due to a lack of data. Therefore, we will focus on the last five recessions, for which we have data on both the 10Y-3M and 10Y-2Y yield curve, for the remainder of this analysis.</h4>
<h4><strong>Inversions and asset class returns</strong></h4>
<h4><a href="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg"><img class="alignnone wp-image-3255" src="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=657&h=285" sizes="(max-width: 657px) 100vw, 657px" srcset="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=657&h=285 657w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=150&h=65 150w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=300&h=130 300w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=768&h=334 768w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=1024&h=445 1024w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg 1040w" alt="" width="657" height="285" data-attachment-id="3255" data-permalink="https://jeroenbloklandblog.com/2019/05/08/yield-curve-inversion-recessions-and-asset-class-returns/yc4/#main" data-orig-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg" data-orig-size="1040,452" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="YC4" data-image-description="" data-medium-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=300" data-large-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc4.jpg?w=470" /></a></h4>
<h4>So, what does yield curve inversion tell us about (future) asset class returns? The table above shows the average and median annual returns on most major asset classes, US stocks, global stocks, commodities, gold, US Treasuries and US corporates, as well as US real GDP growth for both yield curves. The returns are calculated as the index change between the first negative reading of the yield curve leading up to a recession, and the first day of that same recession. In short, it calculates the performance between the inversion date and the start of the recession. The last row of the table shows the average annual return for the full sample period, from August 1978 until 1 January 2008. As can be derived from the table, this period was an exceptionally strong period for both stocks and bonds, with average annual returns above their longer-term history.</h4>
<h4>We will now summarize our main findings. First, while there are differences between the returns calculated using the 10Y-3M and 10Y-2Y yield curve, the results are highly comparable. Choosing either yield curve does not lead to different conclusions. Second, while variation in returns is substantial, they are far from extreme. For example, the average and median annual return on all asset classes is positive. No asset class shows severe and structural weakness after inversion, with only gold realizing a negative return in three out of the five inversion periods. But, as the table shows, gold returns are pretty erratic in any case. At the same time, none of the asset classes – again apart from gold –  realized an extraordinarily high average return either. Having said that, for all asset classes the average annual return between yield curve inversion and recession was lower than for the full sample, except for commodities.</h4>
<h4>The deviation from the full sample average return is relatively large for US corporate bonds. For both yield curves, the average annual return after inversion was significantly below 3%, against a full sample return of 8.9%. This observation fits the perception that credits tend to struggle late cycle, as short-term interest rates are lifted by the Federal Reserve and leverage tends to rise. Global stock performance also trails between yield curve inversion and recessions: the average annual return is less than half than the full sample return. This can be explained by the defensive nature of US stock markets, and the fact that most other regions are highly dependent on the US economy, given their ‘openness’. It is a well-known maxim that when the US sneezes, the rest of the world catches a cold.</h4>
<h4>Lastly, with a 7% return, commodities are the only asset class which realized a much better return than the full sample average (2.8%) after yield curve inversion. This fits the characterization of commodities as ‘being late cycle.’ As final demand increases during economic expansion, so too does the demand for commodities. Hence, since raw materials are needed to produce goods now, the forward-looking aspect is likely to be of lesser importance than it is for equities and bonds.</h4>
<h4><strong>A word on growth</strong></h4>
<h4>Before moving over to the final part of this analysis, a quick word on growth. As is shown in the final column of the table above, average real GDP growth between yield curve inversion and the start of the recession is very close to, and even slightly above, the average of the full sample. This implies there is no such thing as a gradual cooling of the economy before slipping into recession. This helps explain why forecasting recessions is incredibly hard. Just ask the IMF, which has not been able to predict even half of the recessions just months before they started.</h4>
<h4><strong>Has the yield curve inverted?</strong></h4>
<h4><a href="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg"><img class="alignnone wp-image-3257" src="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=619&h=283" sizes="(max-width: 619px) 100vw, 619px" srcset="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=619&h=283 619w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=1236&h=566 1236w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=150&h=69 150w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=300&h=137 300w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=768&h=352 768w, https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=1024&h=469 1024w" alt="" width="619" height="283" data-attachment-id="3257" data-permalink="https://jeroenbloklandblog.com/2019/05/08/yield-curve-inversion-recessions-and-asset-class-returns/yc2/#main" data-orig-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg" data-orig-size="1614,739" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="YC2" data-image-description="" data-medium-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=300" data-large-file="https://jeroenbloklandblog.files.wordpress.com/2019/05/yc2.jpg?w=470" /></a></h4>
<h4>The yield curve, be it either the rate difference between the 10-year Treasury yield and the 3-month or 2-year yield, has a strong track record in predicting recessions. But has it inverted? Out of the last five recessions, the 10Y-2Y yield curve was always the first to signal a recession. This time, however, the 10Y-3M yield curve briefly inverted in late March, while the 10Y-2Y yield curve did not. While one should refrain from arguing that ‘this time is different’ as much as possible, the fact that the 10Y-3M curve inverted first makes this case different by definition. Quantitative easing followed by quantitative tightening (balance sheet reduction) could perhaps explain this divergent sequence, providing a potential argument why this yield curve inversion ‘doesn’t count’. But there were compelling reasons (a savings glut, structural budget surpluses) before to explain why yield curve inversions should not precede a recession. When looking at both yield curves and their forecasting history, it’s simply impossible to say if a recession signal has been given.</h4>
<h4>Still, as we believe it is possible to establish that we are in the later stages of the economic cycle, it could prove prudent to become somewhat less enthusiastic about the return prospects of corporate bonds (as reflected in our multi-asset portfolios) and be a bit more optimistic about those of commodities. To be continued…...</h4>
<p>Courtesy of <a href="https://jeroenbloklandblog.com/2019/05/08/yield-curve-inversion-recessions-and-asset-class-returns/" target="_blank" rel="noopener">jeroenbloklandblog</a></p>
</div>Yield Curve Inversion We're All Watchinghttp://stockbuz.ning.com/articles/yield-curve-inversion-we-re-all-watching2019-03-25T23:27:47.000Z2019-03-25T23:27:47.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>Whether you're watching CNBC, Twitter or another news outlet, you're hearing a great deal of talk about the odds increasing that the <a href="https://www.cnbc.com/2019/03/25/the-us-bond-yield-curve-has-inverted-heres-what-it-means.html" target="_blank" rel="noopener">Fed will drop rates</a> soon.  Everyone's cheering it on..........yet no one's talking about recession possibilities.  <em>Don't say 'recession' on live tv!  </em><em>Keep that notion out of your head!</em>  At least I believe that's what Trump is thinking as he warms up for his 2020 campaign.  He wants the market "up, up, up".  A strong stock market with plenty of green and profits in your pocket.  If it fails after 2020, so be it.  At least he'll have his re-election and be further away from any prosecutorial attacks for four more years.  If he loses, blame it all on the Democrats!</p>
<p>In the meantime our yield curve continues to invert, or decay if you see it that way; implying a rough road ahead for the U.S. as China and European countries slowing low and behold, the U.S. having a "global market", the U.S. looks to be slowing as well.  <em>Shocker!</em></p>
<p>Now the US housing market is slowing and everybody should be aware of this.  Then there's the <em>Washington Post</em> declaring <a href="https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2018/11/20/the-finance-202-wall-street-predicts-economy-slowing-dramatically-as-2020-nears/5bf346a11b326b392905493e/?noredirect=on&utm_term=.2070c5930583" target="_blank" rel="noreferrer noopener" aria-label="(opens in a new tab)">“Wall Street Predicts Economy Slowing Dramatically.”</a>  The story says investment bank Goldman Sachs is predicting a second-half of 2019 slowdown due to the fading effects of federal tax cuts and rising federal interest rates. </p>
<p>So what do traders do?  Of course they now believe Powell will "bail us out" once again and lower rates, rather than raise.  <em>Save us from the big slowdown!</em>  The big question now is, how low can he go?  Now where near as low as they did after the financial crisis but will it be enough?  They're now betting on a rate cut in September but at least one Pragmatist stands by his guns and <a href="http://adventuresincapitalism.com/2019/03/25/fed-no-stop-raising-rates/" target="_blank" rel="noopener">hopes for a hike</a> - <em>bring it now. </em> I wish he were right but this is a market under Trump.  All normal bets are off.</p>
<p>Consider this:  The U.S. is on average two years ahead of Europe in terms of economic rebound and growth.  If we cut rates, they follow.  If we hike, they will eventually follow suit........once the nasty Brexit turmoil is behind them, but it won't be this year.  The U.S. should be leading.  We should hike further and let  equities suffer their correction.  That would be a buying opportunity for all. </p>
<p>The 2020 election should have nothing to do with price discovery.  Keep it separate and apart.  Now we must consider, will Trump let us?</p>
<p><a href="{{#staticFileLink}}1611175090,original{{/staticFileLink}}" target="_blank" rel="noopener"><img class="align-left" src="{{#staticFileLink}}1611175090,RESIZE_710x{{/staticFileLink}}" width="619" height="400" /></a><a href="{{#staticFileLink}}1611333468,RESIZE_1200x{{/staticFileLink}}" target="_blank" rel="noopener"><img class="align-right" src="{{#staticFileLink}}1611333468,RESIZE_710x{{/staticFileLink}}" width="558" height="271" /></a></p>
</div>Gundlach On GDP, Oil, Bonds And Morehttp://stockbuz.ning.com/articles/gundlach-on-gdp-oil-bonds-and-more2015-01-04T22:59:26.000Z2015-01-04T22:59:26.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p style="font-size: 15px;"><span class="font-size-2"><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1291146?profile=original"><img class="align-left" src="http://storage.ning.com/topology/rest/1.0/file/get/1291146?profile=RESIZE_320x320" width="300"></a>It seems not all money managers out there have the warm-n-fuzzies for equities in 2015. Especially considering the almost two year sell-off in commodities, finally joined by crude oil in dramatic, face ripping action. In fact, one feels that the rise in interest rates in 2015 will do what is not expected; flatten the yield curve.</span></p>
<p><span class="font-size-2">If the curve flattens gradually, most traders said it probably means investors believe the Fed will keep future inflation in check with gradual rate hikes. Bond traders hate inflation because it erodes the value of their fixed-income investment.</span></p>
<p><span class="font-size-2">But if the curve-flattening trend speeds up?</span></p>
<p><span class="font-size-2">"It's time to trade out of investments whose success depends on a strong economy... for both stocks and corporate bonds," said Anthony Crescenzi, chief bond market strategist at Miller, Tabak & Co., an institutional brokerage.</span></p>
<p><span class="font-size-2">This means reducing exposure to sectors like retail, transportation and automobiles and moving into defensive picks like health care and consumer goods.</span></p>
<p style="font-size: 15px;"><span class="font-size-2"><a href="http://online.barrons.com/articles/jeffrey-gundlachs-surprising-forecast-1420259030" target="_blank">Jeffrey Gundlach @ DoubleLine</a> says he’s constantly asked “how low oil prices can go,” and he responds that no one will know until they stop falling. “That answer isn’t meant to be cute,” he says. “When you have a market that showed extraordinary stability for five years -- trading consistently at $90 [a barrel] or above -- undergo a catastrophic crash like this one, prices usually go down a lot harder and stay down a lot longer than people think is possible.”</span></p>
<p style="font-size: 15px;"><span class="font-size-2">Likewise weighing on U.S. bond yields will be brisk foreign buying from investors in Japan and Europe, where long-term sovereign debt bond yields are mostly lower than U.S. rates and economic growth prospects are less bright. “Everybody worried about what would happen to the U.S. government [bond] market when the Fed ended [its third round of quantitative easing] last fall and stopped its heavy monthly government bond purchases,” he points out. “The answer, of course, is that foreign buying easily replaced declining government support of the market. And the strengthening dollar, which we think will continue, only makes U.S. bonds all the more attractive, for not only do foreign investors benefit from higher relative rates, but they also win on currency translation profits.”</span></p>
<p style="font-size: 15px;"><span class="font-size-2"><strong>GUNDLACH ISN’T PARTICULARLY</strong> sanguine about the prospects for U.S. stock markets. Early in the year, rebalancing of diversified institutional portfolios from stocks to bonds will create some price undertow for equities, he claims. Also, he worries that gross-domestic-product growth for next year and 2016 is unlikely to hit the 3%-plus annual targets that forecasters are assuming. That’s because the deflationary tide unleashed by a slowing world economy and excess capacity will begin to lap against U.S. shores by the middle of 2015. A strengthening dollar won’t help U.S. competitiveness.</span></p>
<p style="font-size: 15px;"><span class="font-size-2">Low oil prices will begin to wreak real havoc on employment, capital spending, loan collateral values, energy-company balance sheets, and the junk-bond market. “The boost to U.S. consumers from lower pump prices is the first shoe to drop, but the negative secondary effects from the crude-oil price collapse take longer to surface,” he says.</span></p>
<p style="font-size: 15px;"><span class="font-size-2">There’s plenty wrong globally that will eventually weigh on the stock market. He mentions the obvious. Emerging-market economies are sharply slowing. China, despite its current stock market boomlet, rests on shaky financial and economic foundations. Greece threatens to come apart again. Russia is a basket case. Sinking oil prices threaten to amp up geopolitical risks that Russia or Iran might do something dangerous out of economic desperation. Currency wars impend, led by Japan’s systematic yen-devaluation campaign.</span></p>
<p style="font-size: 15px;"><span class="font-size-2">But such factors constitute the wall of worry that bull markets typically climb. Bad news or weakening fundamentals can, as often as not, have scant impact on the course of the stock market.</span></p>
<p style="font-size: 15px;"><span class="font-size-2">For Gundlach, a mathematics whiz, some of the charts and technical indicators he religiously follows are what give him pause about stocks and the global economy. He sent us over 70 charts from a recent presentation to make various points about what is going on in the belly of the beast.</span></p>
<p style="font-size: 15px;"><span class="font-size-2">One shows U.S. CRB Index Futures -- weighted commodity prices going back five years. To the untrained eye, there’s not much to see beyond a vertiginous peak made between late 2009 and late 2010 with a series of smaller peaks saw-toothing down to present levels. But Gundlach draws another conclusion: “Look, commodity prices have fallen back to their lows of 2009, which of course was at the height of the financial crisis. Something is obviously very wrong these days in the global economy.”</span></p>
<p style="font-size: 15px;"><span class="font-size-2">Another chart, delineating the movement in yields of two-year government securities of various key euro-zone nations over the past 14 months, looks like a tangle of spaghetti. But Gundlach points to an interesting divergence that has shown up since September, when the rate on German debt sharply diverged from two-year rates on Italian and Spanish debt. The German yield turned negative, while the two Club Med countries’ yields headed the other way. This told Gundlach that trouble lies ahead for the euro zone beyond the headlines of European political unrest. “Folks in Europe are obviously losing confidence and scared if they are willing to pay Germany for the privilege of parking their funds there,” he says.</span></p>
<p style="font-size: 15px;"><span class="font-size-2">Considering his funds had a banner year, with his flagship <a href="http://online.barrons.com/fund/snapshot.html?symbol=DBLTX">DoubleLine Total Return Bond</a> fund (ticker: DBLTX), with $40 billion in assets, and <a href="http://online.barrons.com/fund/snapshot.html?symbol=DBLFX">DoubleLine Core Fixed Income</a> fund (DBLFX), with $3.4 billion, finishing in the top decile of their Morningstar groups. Likewise, the <a href="http://online.barrons.com/fund/snapshot.html?symbol=DBLEX">DoubleLine Emerging Markets Fixed Income</a> fund (DBLEX) ended in the 96th percentile of its Morningstar class......I'd say he's called it better than most in 2014. It would spell pain for those continually attempting to short bonds but then again, the market tends to do what we don't expect, doesn't it.</span></p>
<p style="font-size: 15px;"><span class="font-size-2">Happy New Year</span></p></div>