After reviewing the very red markets week of Feb. 6-10, DoubleLine’s Jeff Mayberry and Sam Lau discuss changes to the U.S. Bureau of Labor Statistics’ methodology in calculating the Consumer Price Index (CPI) as The Topic of the Week (13:05). The first of two changes that will be in place for January’s print (coming out on Valentine’s Day this Tuesday) concerns a shift from using two years of data points to only one year of data points to compute CPI. Jeff notes this will mean a reliance on faster-moving data points, and he adds this change will mean that the first COVID-19 year of 2020 will be excluded from 2023 CPI prints. Both Jeff and Sam look forward to seeing how this change will be adapted into bullish and bearish readings of Tuesday’s CPI print. The second change concerns seasonality factor adjustments (20:03), which means that CPI prints from the first part of 2022 are now lower, and prints from the latter part of the year are higher.
January’s positive performance was reversed in the first full week of February with red pretty much across the board (2:25). It was a light week in Macro Land (7:48), with jobless claims higher than expected, and University of Michigan inflation expectations flat. On the Fed front (9:05), Chair Jerome H. Powell offered some insight into the FOMC process in a sit-down interview, and two governors pushed a rates-higher-for-longer message. In addition to CPI, next week’s data prints will include producer prices and the Leading Economic Index (23:51). This episode was recorded after market close on Feb. 10, 2023. Go Rihanna!
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Mr. Mayberry joined DoubleLine in 2009. He is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives‐based and multi‐asset strategies. Mr. Mayberry is a Strategist on the Fixed Income Asset Allocation Committee and a contributing member on our Global Asset Allocation and Macro committees. He also co-hosts DoubleLine’s weekly Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcast. Prior to DoubleLine, Mr. Mayberry was a Senior Vice President at TCW for nine years within the Mortgage Group, where he specialized in portfolio and fund monitoring and analytics. He holds a B.S. in Engineering from Harvey Mudd College and an M.S. in Financial Engineering from the Peter F. Drucker Graduate School of Management at Claremont Graduate University.
Mr. Lau joined DoubleLine in 2009. He is a Strategist on the Fixed Income Asset Allocation (FIAA) Committee and a contributing member on the Global Asset Allocation and Macro Committees. Mr. Lau is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives-based and multi-asset strategies, including DoubleLine's Shiller Enhanced CAPE®, Shiller Enhanced International CAPE®, Real Estate and Income, and Multi-Asset Trend strategies. He also co-hosts the Sherman Show (Twitter @ShermanShowPod, ShermanShow@Doubleline.com) and Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcasts. Prior to DoubleLine, Mr. Lau was a Vice President at TCW where he worked under Jeffrey Gundlach as a Research Analyst in the Mortgage Group. He holds a B.S. from the University of Wisconsin, Madison and an MBA from the Marshall School of Business at the University of Southern California.
