Friday, April 8, 2011

GE (GE) Slashing Bond Risk on Market's ‘Exuberant’ Outlook

The investment arm of General Electric (NYSE:GE) is slashing its exposure to high-yield corporate bonds, emerging-market debt and commercial-mortgage securities as quickly as possible, as they see investor sentiment concerning the U.S. economy crumbling.

GE Asset Management has been cutting holdings of riskier securities since the latter part of February, after liking them as they rallied over the prior 14 months.

The U.S. economy faces a renewed housing slump that may last for years as officials reduce government support amid a lack of “bread-winner job” creation and weak wage growth even as unemployment slowly falls, assuming that's even sustainable or real, depending on how the numbers are reported.

Expectations are the current positive outlook of blind investors is going to take a big hit and bring them back to reality. GE is preparing for that approaching moment.

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