DoubleLine Portfolio Manager Eric Dhall and Analyst Mark Kimbrough survey a rough week for stocks and bonds ended May 23, 2025. Those losses followed the May 16 announcement of Moody’s downgrade of the U.S. to Aa1 from Aaa on the rating agency’s outlook for the federal deficit to rise to nearly 9% of GDP by 2035 from 6.4% in 2024. Eric and Mark begin with a dive into fixed income markets (0:30), which saw Treasury yields rise on the long end of the curve. The yield on the long bond Wednesday through Friday closed above previous resistance of 5.00%. “With these concerning fiscal deficits, investors seem to expect more of a term premium,” Eric Dhall notes. “I think that’s the reason for higher rates on the long end of the Treasury curve – as we’ve been saying for a long time at DoubleLine.”
Every sector of the S&P 500 ended the week (9:18) in the red, led by energy as speculators considered the possibility of crude oil production increases by Saudi Arabia in the wake of closed-door meetings by President Trump with leaders of that country as well as Qatar and the United Arab Emirates. Notwithstanding the week’s losses, Eric Dhall notes that all these sectors remained in the green on a month-to-date basis. Commodities (11:47) were up, led by precious metals but also supported by gains in copper, considered a macro bellwether.
For the week’s macro news (13:00), Mark Kimbrough observes a weak Leading Economic Indicator report and an uptrend in continuing jobless claims. However, he also points to “decent expansions” in the S&P Global U.S. PMI manufacturing and services surveys for May 12-21, the first survey period since the Trump administration paused tariffs. For the week ahead (17:40), Eric and Mark will have on their radar the OPEC+ meeting, durable goods orders, the Conference Board’s consumer confidence report, the second estimate of first quarter GDP, personal income and spending, and the PCE index.
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Mr. Dhall joined DoubleLine in 2013. He is a Portfolio Manager on the Macro-Asset Allocation team where he works with portfolio management performing analysis and trading for derivatives-based and multi-asset strategies. Mr. Dhall’s research and analysis has contributed to the team’s development of DoubleLine’s smart-beta suite of strategies. Prior to DoubleLine, he worked at Capital Group performing quantitative analysis in fixed income. Prior to Capital Group, Mr. Dhall was an instructor in finance at the UCLA Anderson School of Management and a research instructor at the UCLA Samueli School of Engineering. Previous to that, he worked in International Finance at Gulf Machinery Company. Mr. Dhall holds a B.S. in Physics with a secondary emphasis in Business from the University of California, Berkeley and an M.S. in Financial Engineering from the UCLA Anderson School of Management.
Mr. Kimbrough joined DoubleLine in 2012, where he worked primarily on Agency Mortgage Backed Securities and the Fixed Income Asset Allocation process as a member of the Risk Analyst team. He transitioned to his current role in 2019 where he serves as an Analyst on the Macro Asset Allocation team. Prior to DoubleLine, Mr. Kimbrough was at Western Asset Management working on systems monitoring and development within the Risk Department. He holds a BS in Business Administration with a concentration in Real Estate Finance and a minor in Economics from the University of Southern California. Mr. Kimbrough is a CFA® charterholder.
