Smart Investor: Rising Income Potential on Bonds, What’s Next for Gold, and Anthropic IPO Preview

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In this week’s newsletter:

• Weekly Markets Wrap
• Strong August Jobs Report Sharpens Fed’s Focus on Inflation
• Why This Top T. Rowe Bond Manager Thinks Yields Can Keep Going Higher
• A Growing Risk in Private Credit and How to Assess It
• September Stock Market Outlook: How to Position Your Portfolio During a Risky Stage
• What’s Next for Gold Prices After the Latest Rebound?
• Anthropic’s IPO Will Be Huge—and Risky. Here Are the Challenges Investors Should Watch
• How Anthropic Makes Money—and What Investors Should Know Ahead of Its IPO Filing
• Weekly Calendar

Many investors pay little attention to the bond market, even if a big slug of their portfolio is invested in bond ETFs or funds. But over the last couple of weeks, that’s where the action has been. Bond yields have risen in the United States and around the globe—to multi-decade highs in some cases. As our Europe-based team explained on Tuesday, a range of significant forces is driving bond prices lower and bond rates higher.

Here in the US, Leslie Norton checked in with T. Rowe Price’s Kenneth Orchard, a top-performing bond fund manager, about how much higher yields could go, for how long, and importantly for investors, why they are looking attractive when it comes to income potential.

One factor affecting the US bond market is continued solid economic growth, as evidenced by rising two-year bond yields following the August jobs report. Colin Laidley checked in with economists for their take on the data and what it could mean for possible Federal Reserve interest rate increases.

We’ve been reporting on growing strains within the private credit market, a corner of the bond market that some money managers had been touting as the next big thing for individual investors. Morningstar manager research analyst Brian Moriarty has an excellent explainer of the growing risk around “payment in kind,” and what investors need to know.

While investors have been pushing bond prices down and yields up, they’ve also moved back to gold. The precious metal bounced back in August after it collapsed earlier this year. Valerio Baselli spoke with analysts about whether gold’s rally can continue.

In the stock market, Morningstar chief US strategist Dave Sekera has his latest monthly outlook. Sekera reviews valuations and where he thinks investors should be positioned in what he says is a risky stage for the stock market.

Lastly this week, we look ahead to what could be the next big event for the stock market: Anthropic’s IPO. The frontier AI lab could file to go public next week, and it will likely be the biggest IPO in history. (Sorry, Elon.) In a two-part Q&A, I spoke with PitchBook analyst Harrison Rolfes about key questions investors need to answer, such as how exactly Anthropic makes money, the durability of its business strategy, the big risks buyers will need to consider, and of course, how much the company might be worth. Part one is here, and part two is here.

As always, visit our Markets page for our latest coverage, along with our full weekly calendar of key upcoming data and events.