After surveying the week’s macro news and carnage in equity, fixed income and commodity markets, host and Portfolio Manager Jeff Mayberry and guest and Quantitative Analyst Eric Dhall unpack (13:48) the market-jarring details of the Federal Reserve’s latest dot plot and Chair Powell’s Sept. 21 news conference. The new dot plot showed a 4.37% median of Fed policymakers’ projections for the federal funds target rate by the end of 2022, a “huge shift” Eric Dhall notes from the 3.4% projection in the previous dot plot that forced repricings across the financial markets.
The podcast episode begins with a review of the Sept. 19-23 of U.S. stocks (1:36), down 4.6% on the S&P 500 with the energy sector worst-off with a loss of 9%. All major sectors of the fixed income markets (3:33) sold off, with the Bloomberg US Aggregate Bond Index down 1.6% and outside the Agg, high yield down 2.8% and emerging markets down 2.7%. Commodities were no place to hide (4:37). The Bloomberg Commodity Index dropped 3.8%, led by the energy complex with West Texas Intermediate crude oil falling 7% to $79.12 per barrel.
Looking ahead to macro news for Sept. 26-30 (25:58), Jeff Mayberry and Eric Dhall are especially on lookout for Friday’s release of the Fed’s preferred inflation indicator: the Personal Consumption Expenditure indicator and its Core PCE component.
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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 (FIAA) 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.