Bill Gross says buy short-term US papers to play US debt ceiling crisis | MarketTalk: What’s up today? | Swissquote

Show notes

The week started on a mixed note. Bank stress further eased with PacWest and Western Alliance, which were the two banks that were on the chopping block after the First Republic Bank got swallowed by JPM, rallied, but gave back most of earlier gains.
Federal Reserve’s (Fed) senior loan officer opinion survey came in worse than expected. The data showed that the banks who tightened credit conditions were higher than expected, around 46%, versus 44.8% expected.
On the political front, tensions regarding the US debt ceiling impasse remain high as US President Joe Biden meets congressional leaders today to discuss about a possibility to lift the debt ceiling to avoid a default which could hit the US as early as June 1st.
While suspense is killing everyone, Bill Gross, Pimco’s ex CIO says it’s a good idea to buy short term US papers at the current prices, as the debt ceiling discussion is ‘ridiculous, it always gets resolved’. Buying one, two-month treasury bills at a much higher rate than longer term papers is a good opportunity, according to him.
In FX, the US dollar outlook remains soft due to the bank stress and the debt ceiling impasse, which both increase the chances of slower growth and soften the Fed expectations.
In energy, American crude advanced past $73.50 per barrel yesterday, but slipped below the $73 level on worries that the Chinese recovery may not be as strong as predicted, and that slower global growth could further hit demand. Price advances into $75/76 will likely see strong resistance.
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