'Bond King' Bill Gross says he's 'out' of regional bank stocks – and is bearish on 10-year US Treasurys
Jim Young/Reuters
- "Bond King" Bill Gross says he's sold his holdings in regional bank stocks after a good run.
- "I'm out of regional banks. It's been a good run. Maybe they go down a little. If not -- good run," Gross said in a post on X, formerly known as Twitter.
- The PIMCO co-founder scooped up regional bank stocks just four months ago when chaos in the banking sector broke out.
"Bond King" Bill Gross said he's sold his holdings in regional bank stocks just four months after snapping up battered shares in small US lenders.
The PIMCO co-founder scooped up shares in Western Alliance and PacWest, Synovus Financial as well as SPDR S&P Regional Banking ETF, back in April, after turmoil broke out in the banking industry following the collapse of Silicon Valley Bank.
The shares have jumped from the lows hit earlier this year, with PacWest and Western Alliance surging 300% and 357% from a bottom reached in May.
"I'm out of regional banks. It's been a good run. Maybe they go down a little. If not -- good run," Gross said in a Thursday post on X, formerly known as Twitter.
Regional bank stocks have been trading at huge discounts since a confidence crisis spread across the US banking sector earlier this year. Investors grew worried smaller lenders could face the same fate as SVB, sparking a wave of deposit withdrawals.
Most recently, Gross revealed he made "mucho bucks" on his regional bank holdings, fueling his decision to cash out.
Like Gross, other investors, including Greenlight Capital founder David Einhorn and "Big Short" legend Michael Burry. also saw chaos in the banking sector as a good opportunity to make money.
In a follow-up tweet, Gross added he's bearish on 10-year US Treasurys, likely because the Federal Reserve could continue hiking interest rates in a bid to cool inflation. "10 yr yields? 4.25 for now but overall bearish. Curve may disinvert by 10 yr rising," he said.
"We shall see with CPI up next," he added.
Bond prices tend to have an inverse relationship to interest rates. When interest rates go up, bonds usually fall.