DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall begin their review of the week ended Aug. 18 with a rough market for equities (1:18) All 11 sectors of the S&P 500 ended the week in the red. The catalyst for the losses in equities appeared to be higher interest rates (2:46), with the yield of the 10-year Treasury notably breaking above 4.20%. Higher rates (4:22) virtually by definition led to negative returns in many areas of fixed income, including for the Bloomberg US Aggregate Bond Index, the most widely followed gauge of domestic high grade bond performance. Commodities (5:47) shared in the red ink, led lower by energy and industrial metals.
Dominating the relatively light macro news for the week (9:13) were a major property default in China, robust retail sales in the U.S. (albeit possibly skewed by Amazon Prime day), mixed import prices and the release of the minutes of July 26 meeting of the Federal Open Market Committee (FOMC), the monetary-policy setting body of the Federal Reserve. The FOMC minutes (12:57) may have led markets to price in the likelihood of the federal funds rate remaining higher for longer than previously expected. Looking to the week ahead, Jeff and Eric will be especially tuned in to Federal Reserve officials’ comments at their annual retreat at Jackson Hole, Wyoming (17:45), in particular Fed Chair Jerome Powell’s speech scheduled for 7:05 am Pacific/10:05 am Eastern Friday Aug. 25.
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.
