Extinct him investor fixed income investors interested. They are crushing yields. Joining us now is jeff rosenberg. Its fantastic to get you on the show for this topic, the role that treasuries play in a portfolio, from 2020 looking out. Its a huge topic at blackrock. How are you thinking about this question . This i wrote a piece on and continue to write under the theme on investing without a parachute. This september is a really good example. We wrote pieces on it and everybody is talking about it and its like ok, what does the new world look like that we are going into . In september, equities are down 8 and treasury yields are highlighted by all of those comments. Barely budging. Its the combination of the low yield makes the income relatively unattractive, a couple of comments in there about taking credit risks. And it will come around to that question in a second. But another thing that is difficult about the investing outlook now and where treasury yields are is that they are no
Speaking to him later on in the hour, as well as Bracken Darrell. Lets get back to that leaderboard. U. S. Equities shaking off whatever tensions we do see within china. You have some positive news about the u. S. Buying some of its vaccine. You could see it tested as early as the end of the year. I do want to highlight the euro. Bid, very much soft. A bit here in the 10 year, but the 10 year real yield hit its lowest level since 2012. That means gold is also popping. We are going to break down that later on as well. Overarching story is the conflict between the u. S. And china recently heating up. The u. S. Ordering the closure of the consulate in houston. Eijing vowed to retaliate for more we are joined by state Department Reporter nick. What actually happened and what do we look for Going Forward . Big is that the u. S. Shut down chinas consulate in houston. It is unclear whether they believe specifically there was a great deal of espionage and intellectual property theft connected
Attention to that, with the ecb coming up thats a huge deal. Delivers more stimulus, and the bcp will be really under pressure, down by 4 10 of 1 , but its all about the dollar and its driving Global Equities higher. And the tension between the weaker dollar driving risk themete, and the overall has been the protest here in the u. S. Under covid. Lets break down that disconnect. Torsten, what is your best explanation for the markets versus the headlines . We have discussed why markets are doing well, and we continue to believe that the answer is on the significant firepower coming from the fed. If you change the credit market as dramatically as they have , i spreads are very close to where they were before. All of that is, in plain english, making this look a lot better today than it did a month or two ago. And you have the equity of companies with the support to the credit markets, this is probably an important reason why the equity markets continue to do well. Think the fed is making
Well get to him in a moment as well lets begin with our gang today. Jim, ill kick it to you first as we look at the markets here, it is this legit is this move of the last couple of days something to truly bank on you know i always want to give you a direct answer but this one i got to give you a solid, i dont know. Maybe im playing it both ways, scott. Ive got 8 cash which means im 92 invested after a move like yesterday, i wonder should i put it to work i think we retest the lows based on the degree of uncertainty than the 8 cash will be be such valuable currency to me buying to me what will be well below market or fair value prices that the mistake im willing to make is hold that 8 cash and not invest it right now. You must have a feeling of whether or not you think were going back to the lows are you feeling you want to move away from that because of what happened yesterday and this follow through today ill be totally honest with you, yes yes, i am. On the back of a positive change
Steer the countrys recovery. On markets. Check the s p 500 up 1. 8 , being led by the energy index, even as oil reaches for a 17 and all. Handle. The dollar index close to 100 again, 99. 77. Lets get to Abigail Doolittle for a deeper dive into the markets. Abigail stop gains on the days certainly stand out, possibility of the reopening guidelines from president trump. But what stands out more on the declines in crude oil. Here is an intraday chart, down 7 , down much more before. This is the first month contract which expires next week. Contract, june, is closer to 25, so this may be temporary. Nonetheless, crude oil reflecting the demand picture shrinking on the coronavirus crisis. It is a tell as well on risk appetite. The need the surface for the s p 500, the sector composition is interesting. Consumer discretionary helped out by a lot of those faang stocks. Health care is also solid. Gilead sciences with some good news on a drug that may be helping. In real estate, lots of talk abo