DoubleLine Portfolio Manager Ken Shinoda and Deputy Chief Investment Officer Jeffrey Sherman Sept. 3, 2024, review macro and markets for August amid very likely, but potentially overzealous discounting of, federal funds rate cuts. Highlights include:
(1:02) of Macroeconomic surprises to the downside, which have helped bring interest rates as the markets expectations of rates cuts have increased and been pulled forward.
(4:03) Inflation readings, with Ken Shinoda raising the possibility of a sideways movement in inflation going forward;
(5:55) Labor market readings, including divergent household and establishment surveys and indications of weaker jobs growth but so far not a collapse;
(10:39) An assortment of gauges bearing on the health of the consumer, including wage growth, the savings rate (which while falling does not account for household gains in stocks and home prices or money put to work in money market funds), consumer credit delinquencies and declining hirings by small businesses;
(15:38) Fixed income performance, with strong returns across the board, led by riskier credit and non-Agency commercial mortgage-backed securities;
(24:18) Currencies performance, with the U.S. dollar “near the weakest of the year,” Ken Shinoda notes, “which makes sense because we’re finally going to cut rates.”
(25:15) Commodities’ weaker performance, with lower energy prices supporting disposable income for consumers;
(27:27) Equities’ strong performance with equally weighted portfolios showing recent outperformance amid a correction in mega-cap tech.
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.
As DoubleLine’s Deputy Chief Investment Officer, Jeffrey Sherman oversees and administers DoubleLine’s Investment Management sub-committee coordinating and implementing policies and processes across the investment teams. He also serves as lead portfolio manager for multi-sector and derivative-based strategies. Mr. Sherman is a member of DoubleLine’s Executive Management and Fixed Income Asset Allocation Committees. He can be heard regularly on his podcast “The Sherman Show” (Twitter @ShermanShowPod, ShermanShow@Doubleline.com) where he interviews distinguished guests, giving listeners insight into DoubleLine’s current views. In 2018, Money Management Executive named Jeffrey Sherman as one of “10 Fund Managers to Watch” in its yearly special report. Prior to joining DoubleLine in 2009, Mr. Sherman was a Senior Vice President at TCW where he worked as a portfolio manager and quantitative analyst focused on fixed income and real-asset portfolios. He was a statistics and mathematics instructor at both the University of the Pacific and Florida State University. Mr. Sherman taught Quantitative Methods for Level I candidates in the CFA LA/USC Review Program for many years. He holds a B.S. in Applied Mathematics from the University of the Pacific and an M.S. in Financial Engineering from the Claremont Graduate University. Mr. Sherman is a CFA® charterholder.
