Kaminsky's Call: Position Your Portfolio for Higher Rates
Morgan Stanley, Vice Chairman
Let's suppose President Obama's leakage of a superior jobs report was correct. Would you have been prepared?
This is what we should take away from this morning's underwhelming number.
Well, the most overcrowded trade right now remains intact. Fund managers are still betting against a rise in interest rates.
Whether it be the people I talked to at the SALT Conference in Las Vegas last month, or the participants at the TMANY (Treasury Management Association of New York) Cash Exchange Conference my colleague, Kate Kelly, talked to yesterday, nobody is factoring in the possibility of higher rates for the remainder of 2010.
If the number had been strong (and according to the president, it was very close to being so), coupled with the comments out of the Fed this week, the end of the easy money cycle would be closer than we thought.
My call-to-action: position your portfolio for higher rates, and here's why:
While a strong employment numberwould have been promising for a healthy equity market, it would most likely have signaled a snapback in the bond market. And that snapback will likely still come.
And that would make for some serious headwinds for income-bearing stocks, which tend to be less attractive in a rising-rate environment.
On The Strategy Session, we will always point you in these types of directions to protect your portfolio.
- CNBC's: The Strategy Session
- Help Wanted: Job Listings Offer an Encouraging Sign
- Private Employment Grows Slowly; Weekly Claims Drop
Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, begins Monday, June 7 at Noon ET on CNBC.
Gary Kaminsky does not hold any equity positions.
The content of this blog is published in the United States of America and persons who access it agree to do so in accordance with applicable U.S. law.
All opinions expressed in this blog are solely the opinions of Gary Kaminsky and do not reflect the opinions of CNBC, NBC UNIVERSAL or their parent company or affiliates, and may have been previously disseminated on television, radio, internet or another medium. You should not treat any opinion expressed by Mr. Kaminsky as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Mr. Kaminsky’s opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Kaminsky, CNBC, its affiliates and/or subsidiaries are not under any obligation to update or correct any information provided on this website. Mr. Kaminsky’s statements and opinions are subject to change without notice. No part of Mr. Kaminsky’s compensation from CNBC is related to the specific opinions he expresses.
Past performance is not indicative of future results. Neither Mr. Kaminsky nor CNBC guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this website or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website or on the show. Before acting on information on this website or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.