'Original Bond King' Bill Gross: "Sell Tech Stocks and US Treasuries, Hold Value Stocks"

"US 10-Year Treasury Yield Moves to 4.75%"

As concerns about stagflation (rising prices amid economic slowdown) in the U.S. economy are emerging, Bill Gross, known as Wall Street's "original bond king," advised avoiding tech stocks and investing in value stocks.

On the 25th (local time), Gross stated on the social networking service X (formerly Twitter), "Now is the time to avoid tech stocks and stick to value stocks."

He quoted lyrics from the American classic "American Pie," saying, "The day the music died," and added, "The yield on the 10-year U.S. Treasury is moving to 4.75%. Why hold bonds?"

Gross's remarks came after the U.S. Treasury yields surged and the stock market declined following the release of the U.S. first-quarter economic growth data that day.

According to the U.S. Bureau of Economic Analysis (BEA), the preliminary estimate of real GDP growth for the first quarter was 1.6% quarter-over-quarter (annualized), falling short of the revised 3.9% for the fourth quarter of last year and the Bloomberg analyst forecast of 2.5%. Meanwhile, the core Personal Consumption Expenditures (PCE) price index rose 3.7% in the first quarter, significantly exceeding the expected 3.4%. The economy is showing signs of cooling while inflation is rising, raising concerns about stagflation.

With expectations that the Federal Reserve's rate cut timing will be delayed, the yield on the 2-year U.S. Treasury briefly surpassed 5% during the session and is currently at 4.99%, up 5 basis points (1bp = 0.01 percentage points) from the previous trading day. The 10-year U.S. Treasury yield, a global bond yield benchmark, is trading around 4.7%, up 4 basis points.

All three major indices on the New York Stock Exchange are down more than 1%.