Treasury yields continued to decline for the third consecutive day due to weaker than expected economic data, plunging stock markets and bearish commentary from Bill Gross. The U.S. Department of Labor reported that initial unemployment claims rose to 440,000, the highest level in almost five years. In a separate report, ADP Employer Services reported that private companies reduced payrolls by 33,000 last month. Increasing job losses have heightened concerns that the economy is worsening.
Also negatively impacting the markets were comments made by Bill Gross, manager of the world's biggest bond fund at PIMCO. He opined that the government needs to start buying assets to stem a bourgeoning “financial tsunami.” A process of “delevering,” where banks are shrinking and cutting off lending, is sapping demand for loans, bonds, stocks and commodities, driving down
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