After their survey of the Oct. 10-14 market week (2:13), Jeff Mayberry and Samuel Lau take a deep dive (23:50) into the household inflation expectations component of University of Michigan consumer-sentiment survey. The release of the preliminary October survey on Friday showed a rise in expectations of higher prices, rattling stock and bond markets. The report followed Thursday’s (10:05) Consumer Price Index report that showed a 0.6% month-over-month (MoM) rise in core consumer prices in September vs. expectations of a 0.4% increase, pushing the year-over-year (YoY) rise to 6.6%, its hottest number since August 1982.
Jeff and Sam also take a look inside core CPI, noting that while core goods prices decelerated to 6.6% YoY in September from 7.1% YoY in August, core services prices accelerated to 6.7% YoY from 6.1% YoY. A key culprit behind the higher services inflation was a rise in owners’ equivalent rent (13:53), up 0.75% MoM or 6.7% YoY. In terms of market responses to the week’s inflation news, Jeff and Sam take note of higher yields across the Treasury curve, especially a 19-basis point rise for week in the two-year Treasury yield (3:03) to 4½%, a level last seen in August 2007.
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.
