After reviewing stocks (1:17), bonds (2:51) and commodities (4:14) for the Oct. 9-13 market week, DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall cover the week’s macro news (6:42), including somewhat Fed-friendly inflation prints. Based on Fed Funds futures pricing showing a one-third chance of a hike in that key policy rate by year end (9:47), Eric says, “The market is on board with the Fed where the Fed’s happy with short-term rates where they are.” The battle on inflation, they caution, is far from over. “We’re kind of in a conundrum,” Jeff notes, “where if the market rallies on the Fed doing less, then the Fed has to do more, and the market sells off.” For the Topic of the Week (17:51), Jeff Mayberry demystifies the arcana of interest rate swaps and the phenomena of negative swap spreads. Looking ahead to the week of Oct. 16-20 (26:33), Jeff and Eric foresee a relatively light week for macro prints. Items under their surveillance include the retail sales advance number for September, industrial production, capacity utilization, manufacturing, the Fed’s Beige Book, jobless claim and the “broken clock” of recession indicators, the Conference Board’s Leading Index of 10 leading economic indicators.
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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.