DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau face the heat outdoors and indoors recapping the red market week of Oct. 2-6 before a timely revisit of recession indicators (16:43). Jeff and Sam take a look at the still inverted 2s10s and 3s10s on the U.S. Treasury yield curve and what the de-inverting of these two signals could mean for the timeline of a possible recession arrival. It might be sooner than you think. The two also run through some other recession indicators, including the LEI and a strong labor market, that are sending out mixed signals (28:17).
For the market week (1:01), Jeff and Sam discuss a rough run for stocks and fixed income (4:23) before looking at a pretty good performance for commodities (6:58). Over in Macro Land (9:20), data prints included a beat of expectations for the ISM Manufacturing PMI (still contractionary) and a very big beat for nonfarm payrolls (11:34). This week’s Fed Speak includes the proposition that doing nothing is an activity (14:02). Next week will bring a flood of data prints, including PPI, CPI and import numbers (31:51). This episode was recorded after market close on Oct. 6, 2023.
For previous discussion of recession signals, check out:
Episode 107: Timing the Lead Times of the Treasury Yield Curve
Episode 97: Will 2023 Break the 3s10s’ Perfect Streak on Calling Recession?
Episode 82: Recession Indicators: Reliability and Readings Now
Episode 52: Yield Curve Flattening as an Economic Indicator
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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.
