DoubleLine Portfolio Manager Ken Shinoda returns with his Channel 11 update for May, a month where equities pushed to new heights, and the bond market quietly repriced higher. Led by a powerful rebound off April lows in tech and momentum names, the Nikkei, Dow Transports and Russell 2000 indices moved into position among the standout performers of the year. Europe continued to lag, weighed down by high energy prices and manufacturing-heavy economies, while crypto pulled back as rotation into AI trades picked up steam. On the commodity front, crude oil finally showed some softness as hopes creeped into the market for a resolution to the Middle East conflict and a potential opening of the Strait of Hormuz.
The macroeconomic picture was one of resilience with a catch. Manufacturing staged a genuine rebound on the back of hyperscaler capex and data center buildout, and services remained strong globally outside of Germany and the U.K. But the bond market repriced meaningfully – the 10-year yield shifted from 4.25% to a new center of gravity around 4.50%, and the market is now pricing in the possibility of a hike rather than cuts. Mr. Shinoda sees the 30-year holding around 5% as an important stabilizer for risk assets, and notes that inflation break-evens are coming down with energy prices, which he calls good news. In fixed income, it remained a floaters and short-duration story, with credit spreads grinding tighter, and the securitized sector still looking relatively cheap.
Mr. Shinoda joined DoubleLine at inception in 2009. He is Chairman of the Structured Products Committee and oversees the non-Agency RMBS team specializing in investing in non-Agency mortgage-backed securities, residential whole loans and other mortgage-related opportunities. Mr. Shinoda is co-Portfolio Manager on the Total Return, Opportunistic Income, Income, Opportunistic MBS and Strategic MBS strategies. He is also lead Portfolio Manager overseeing the Mortgage Opportunities private funds. Mr. Shinoda is also a permanent member of the Fixed Income Asset Allocation Committee, as well as, participating in the Global Asset Allocation Committee. In addition, he hosts DoubleLine’s “Channel 11 News” (Twitter @DLineChannel11, dline11@doubleline.com), a webcast series that provides market insights and commentary with peers and industry experts. Prior to DoubleLine, Mr. Shinoda was Vice President at TCW where he worked in portfolio management and trading. He holds a B.S. in Business Administration from the University of Southern California and is a CFA® charterholder.
