Bill Gross, co-founder and former Chief Investment Officer of Pacific Investment Management Co., has reversed his cautious stance on regional banks, asserting that the “regional bank falling knife has hit bottom.” He now believes it is a favorable time to invest in regional banks, contradicting his previous inclination to wait.
In a recent post on X, Gross revealed his investments in Truist Financial Corp., Citizens Financial Group Inc., KeyCorp, and First Horizon Corp. These moves signal a significant shift in his investment strategy.
Earlier in October, Gross had expressed his confidence in the “extraordinary long-term value” of regional banks but had been holding back, waiting for their valuation to drop to 60% of book value with 7% yields. Just a week prior, he had also voiced concerns about the possibility of a U.S. recession in the fourth quarter.
In his most recent statement, Gross not only advocated for investing in regional banks but also offered a strategic perspective for traders grappling with the “uncertain” Treasury yield landscape. He recommended focusing on the “2/10 curve continuing to disinvert” and predicted that it would turn positive over the next six months.
Bill Gross’s change in outlook underscores the dynamic nature of the financial markets and the importance of adaptability in investment strategies. His investments in regional banks suggest that he sees significant potential in this sector, marking a notable departure from his earlier stance.
