U.S. stocks vs bonds: Warren Pies picks a side

Bonds are a better investment than stocks in the current environment, says Warren Pies. He’s the Founder of 3Fourteen Research.

Why does Pies find equities less attractive?

Members of the FOMC did not actively discuss cutting rates in the near term in their most recent meeting, as Invezz reported here.

What it suggests is that we’re in a “Fed Pause”, as per Warren Pies – a backdrop that has historically favoured both bonds and stocks. Still, the 3Fourteen expert actually sees bonds as a safer bet for now than stocks.

Note that the S&P 500 has already gained over 10% since late October.

U.S. stocks have priced in a soft landing

Pies agreed that a soft landing which tends to be a positive for equities is a real possibility but said the related benefit is already priced in.

Market currently pins the possibility of a rate cut in March at 33% which the 3Fourteen analyst sees as a bit too over-optimistic. On CNBC’s “Closing Bell”, he noted:

Yield on the U.S. 10-year Treasury Bond ended this past week at 4.408% versus the high of about 5.0% in October.