Halister News

(Bloomberg) -- Treasury bonds should have “further appeal to domestic investors,” as 2Q “marks the high point of economic performance” for this year, Hoisington Investment Management said in quarterly report.

• Foreign investors will also continue to be attracted to UST bonds since “stressed conditions” have pushed down yields in Japan, Germany and France, Van R. Hoisington and Lacy Hunt say in report
  • NOTE: Barclays strategists said in conference call that U.S. bond has been “single best performing asset in past six months, not annualized”
• Economic slowdown will cut the “already weak nominal” growth trajectory
  • 2016 nominal GDP est. 2.5%, down from 3.1% in 2015
• With “normal lag,” annual inflation rate should begin to drop toward year-end
• Elevated debt levels are producing “poor business conditions worldwide”
• M2 growth above 6.5% y/y, though dropped to lowest level since early 1950 in 1Q
  • “Such a slump is to be expected when the wrong type of debt increasingly dominates the total”
• Hoisington manages $5.7b, including the Wasatch-Hoisington U.S. Treasury Fund (13.2% avg annual return over 5 years)