30Y Treasury bond is ‘best hedge’ against a hard landing - BofA’s Hartnett

seekingalpha2024-05-18

Returns on the 30-year U.S. Treasury (US30Y) have been abysmal over recent years but a shift may be in store this year, according to Bank of America (BofA) Investment Strategist Michael Hartnett. The...

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The...</p>\n\n<a href=\"https://seekingalpha.com/news/4108035-30y-treasury-bond-economy-markets-best-hedge-hard-landing-gdp-growth-bofa-hartnett\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>30Y Treasury bond is ‘best hedge’ against a hard landing - BofA’s Hartnett</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n30Y Treasury bond is ‘best hedge’ against a hard landing - BofA’s Hartnett\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-18 22:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/4108035-30y-treasury-bond-economy-markets-best-hedge-hard-landing-gdp-growth-bofa-hartnett><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Returns on the 30-year U.S. Treasury (US30Y) have been abysmal over recent years but a shift may be in store this year, according to Bank of America (BofA) Investment Strategist Michael Hartnett.  The...</p>\n\n<a href=\"https://seekingalpha.com/news/4108035-30y-treasury-bond-economy-markets-best-hedge-hard-landing-gdp-growth-bofa-hartnett\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FDN","symbol_name":"First Trust Dow Jones Internet I","start_time":0,"source_url":"https://seekingalpha.com/news/4108035-30y-treasury-bond-economy-markets-best-hedge-hard-landing-gdp-growth-bofa-hartnett","article_id":"2436798185","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/88621226/image_88621226.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2436798185","pubTimestamp":1716040800,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Returns on the 30-year U.S. Treasury (US30Y) have been abysmal over recent years but a shift may be in store this year, according to Bank of America (BofA) Investment Strategist Michael Hartnett.  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The total return on 30-year bonds (US30Y) has dropped 45% since April 2020, the biggest four-year loss since 1919, Hartnett highlighted in BofA’s “Flow Show” note this week. But there are signs that economic activity could be moving toward a contraction and that could drive investors to seek protection in haven long-dated Treasury bonds. The “30-year US Treasury [is the] best ‘hedge’ for weaker nominal growth,” Hartnett said. The hard-landing scenario is not widely held on Wall Street, with just 11% of global fund managers in a BofA survey saying hard-landing odds are too low. JPMorgan & Chase CEO Jamie Dimon warned this week that markets are too optimistic about a soft-landing scenario.  “The 3Ps of Positioning, Policy, Profits argue for reversal” of the so-called “Anything But Bonds” trade in the second half of 2024, Hartnett said.   The “Anything But Bonds” view from the bull markets running in credit, stocks, and commodities and strong 6% nominal growth in gross domestic product over the past four years have fueled the bear market in bonds, he said. But Hartnett pointed to troubling signs for the economy, including stagnating retail sales and the highest unemployment rate since January 2022. Those developments are a risk to a key “P” - profits. The “30-year Treasury [is the] best cyclical hedge for hard landing,” he said.  Looking at positioning, “no one” is long the 30-year Treasury (US30Y) with investors concerned about government debt dynamics, he said, noting the government has spent $6.3T in the past 12 months.  Policy wise, there’s usually a “big slowdown” in government spending in the first year of a new presidential cycle, and U.S. voters will head to the polls in November. Also, at the margin, monetary will become easier, fiscal policy will grow tighter over the next 12 months and those factors are positive for bonds, he said.  Hartnett reiterated his view that bonds are in an early secular bear market driven by in part by inflation and deficits. That bear market will end only once Main Street through elections and Wall Street, through failed debt auctions and lower debt ratings “vote for less fiscal excess,” Hartnett said.   Bond ETFs that investors can check out include:   iShares 20+ Year Treasury Bond ETF (TLT) ProShares UltraShort 20+ Year Treasury ETF (TBT) Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF) Schwab Short-Term U.S. Treasury ETF (SCHO)","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.2","shortVersion":"4.30.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2436798185"}