Bianco Research L.L.C.

Fixed income was an attractive asset class for investors in 2023, and many are looking for insights on how to reposition their bond portfolios for what’s ahead. Join BondBloxx’s investment strategist JoAnne Bianco, CFA and VettaFi's Tom Lydon for a recap of fixed income markets in 2023, a deep dive on key themes across fixed income asset classes, and portfolio positioning ideas for 2024. Topics: · Why we think now is the time for investors to increase their allocations to fixed income · Where we believe there may be attractive total return potential in fixed income · How to position bond allocations based on specific views on what’s ahead for the economy

Replay to our 2024 outlook and introduction to our Index and ETF WTBN. (FYI - this was a long video, so we added detailed timestamps) All our videos are here https://lnkd.in/gcW-SJ9S Slide Deck is here https://lnkd.in/gHm98wnb Index Website https://biancoadvisors.com ETF Prospectus https://lnkd.in/ghj8KVWx

Wow!

https://lnkd.in/gC5JeiQz

My take on this Fed hike, statement, and the presser so far ... It is provided the LEAST amount of information of any meeting since they started hiking in March 2022. Powell is going out of his way to say nothing and not commit to anything. So, this meeting has become a Rorschach test. Everyone sees into it what they want.

I have often argued that when a new technology comes along, the biggest mistake is to think this will ONLY reduce costs, thus increasing profit margins. New technology does way more than this. It blows up existing business models. Ask brick & mortar retailers, taxi companies, hoteliers, newspapers, travel agents, Hollywood (now striking over the threat of new technology), and banks struggling to hold onto deposits in a mobile banking app world. So, it is not surprising, but still disappointing, that fund managers in the July BofA Global Fund Manager survey are still stuck with linear thinking about AI adoption. They are arguing little will change, costs go down, so the result is increased profits. Instead, business models are changing. Entirely new industries that currently do not exist will be created, and current industries might be eliminated (again, Hollywood is panicking they are on the chopping block thanks to AI). If fund managers are not careful, they will also find that the labor cost of managing a portfolio will go to zero (meaning they will be out of a job).

After close, and the day after they all passed the stress test, we get these ... *GOLDMAN SACHS TO BOOST QTR DIV TO $2.75/SHR FROM $2.50 *MORGAN STANLEY BOOSTS DIV. TO 85C/SHARE, RENEWS $20B BUYBACK *JPMORGAN PLANNING TO BOOST QTR DIV TO $1.05/SHARE IN 3Q *WELLS FARGO PLANS TO BOOST QTR DIV TO 35C/SHR FROM 30C ---- The big banks are stress tested to see if they can withstand a bad economic downturn. Such a scenario would likely bring about a collapse in interest rates, which is tested. The problem with the big bank failures this year (Silicon Valley, Signature, First Republic) was rising interest rates, not collapsing interest rates. Why doesn’t the stress test consider rapidly rising rates? Is this because rapidly rising interest rates result from an inflation problem, as we have seen in the last year? And most often, the cause of rapid Inflation is a policy failure, such as too much government spending and/or money printing. So, regulators, like the Fed, do not want to consider what would happen to banks should they commit a policy error. And as long as they don’t, these tests have little to no value.

Stock investors are saying the Fed is done to help explain the rally. The problem is that it is not what bond investors are pricing. Remember, the calls for the Fed to pause, pivot, step down, skip, stop, and/or cut have been continuous the last 18 months and continuously wrong the last 18 months. So why will these same calls now work?