REUTERS SUMMIT-Prudential's Peters says U.S. bond selloff overdone

martes 15 de noviembre de 2016 12:14 GYT

(For other news from the Reuters Global Investment Outlook Summit, click here) (Adds comments and background throughout, bylines)

By Jonathan Stempel and Jennifer Ablan

NEW YORK Nov 15 (Reuters) - Gregory Peters, senior investment officer at Prudential Fixed Income, on Tuesday said the steep selloff in U.S. bonds following last week's surprise election of Donald Trump to the White House and the Republican sweep of Congress was overdone.

"We're telling our clients and investors, let's take a deep breath," Peters, who helps oversee $681 billion of assets, said at the Reuters Global Investment Outlook Summit. "It was a snap reaction, and I don't necessarily believe it was a game changer."

Peters had correctly predicted in June, shortly before British voters decided to leave the European Union, that "Brexit" would be a buying opportunity for U.S. securities despite the initial knee-jerk selloff in stocks.

On Tuesday, he said the rally in U.S. stocks and plunge in U.S. bonds after the Nov. 8 U.S. election was more a reaction to the Republican Party's sweep of the White House and Congress than Trump's victory alone.

Peters said the 10-year U.S. Treasury note was now probably near the high end of the 1.80 percent to 2.30 percent trading range he expects in the near term.

The note yielded about 2.24 percent on Tuesday morning.

Peters said the economic stimulus that may result from Trump's policies could extend the current credit cycle by one year, making it a good time to buy high-yield and investment-grade corporate bonds, especially in cyclical companies.   Continuación...