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May 19, 2023 | DoubleLine Minutes

MMM Episode 116: Checking In on Super-Regional Bank Deposits and a Mixed Market Week

After a recapping the mixed market week of May 15-19, DoubleLine’s Jeffrey Mayberry and Eric Dhall take on a Topic of the Week that looks at the in-the-headlines banking industry (13:04). Jeff begins the ToC section with coverage of a Federal Bank of New York blog post* with some interesting data on banking deposit activity from March 2022 to March 2023, when outflows accelerated amid the banking crisis. While that period marked almost $1 trillion in outflows, the activity was concentrated in the super-regional sector. That information leads to the question of the week: Does it matter to the banks if they have excess reserves? Will profitability go up if they have less deposits to pay for? (19:39) Jeff responds with a look at the need for the super-regionals to now pay put more to retain their deposits and what that means in terms of levering up. When not in a Fed tightening cycle, deposits are a very cheap form of having assets.

Looking at the markets, the S&P 500 was up on the week (1:50) while the Agg was down (3:17). It was a light week in Macro Land (6:41), with retail and industrial numbers and a recession-flashing LEI print. Fed Chair’s Jerome H. Powell’s sitdown with former Chair Ben Bernanke offered up some prime Fedspeak (9:57), with Jeff and Eric discussing the event and its impact on the markets. Next week will deliver a lot of data (22:10), including PMI and personal income and savings numbers as well as the April PCE print.

*Bank Funding During the Current Monetary Policy Tightening Cycle

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ABOUT THE HOSTS

ABOUT THE HOSTS

  • Jeffrey Mayberry

    Macro-Asset Allocation

    Jeffrey Mayberry

    Macro-Asset Allocation

    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.

  • Samuel Lau

    Macro-Asset Allocation

    Samuel Lau

    Macro-Asset Allocation

    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.