Six newly public companies including Facebook Inc. will probably join the Russell 1000 Index amid the smallest annual shift in the gauge of large U.S. companies since at least 2004, according to Credit Suisse Group AG.
A rally in the mortgage securities that blew up in the crash of 2008 is leading firms to trim bets in the $1.1 trillion market for home-loan bonds without government backing after similar gains a year ago evaporated.
Redwood Trust Inc. sold bonds tied to about $325 million of new home loans in the fifth offering of securities without government backing since the market froze in 2008, according to a person with knowledge of the transaction.
Investors should avoid real estate investment trusts that buy U.S. mortgage-backed securities because they’ll continue to cut dividends as homeowners refinance mortgages at lower rates, said DoubleLine Capital LP’s Jeffrey Gundlach.
A slump in the $1.2 trillion market for U.S. residential mortgage-backed securities without government-backing may not be “fully reflected” in the results of holders of the debt, according to Ellington Financial LLC Chief Executive Officer Larry Penn.