Despite these concerns, some investors remain optimistic due to the rise of artificial intelligence and increased government spending. However, Bill Gross, former chief investment officer at Pimco, expressed skepticism about these factors validating the notion that "it's different this time". Instead, he recommends taking arbitrage positions on individual stocks like Activision Blizzard and Capri Holdings.
Key takeaways:
- Private payrolls in the US grew by 89,000 jobs in September, far below the 160,000 estimated by Wall Street analysts.
- Stephen Dover from Franklin Templeton Institute predicts that the US's economic resilience is fading, with the restarting of student loan repayments and the risk of a US government shutdown later this year likely to impact growth.
- The yield curves on two-year and ten-year Treasury notes began de-inverting, a sign that a recession may be imminent, with JPMorgan's Priya Misra warning that this makes a hard landing much more likely.
- Despite the economic headwinds, Bill Gross, former chief investment officer at Pimco, prefers to bet on taking arbitrage positions on individual stocks like Activision Blizzard and Capri Holdings, both reportedly on the verge of being bought by Microsoft and Tapestry, respectively.