Jeff Mayberry and Samuel Lau start (2:31) with the positive returns for the week of Oct. 17-21 across all 11 sectors of the S&P 500, aided Friday by a market-moving article in the Wall Street Journal. (The newspaper reported that Federal Reserve officials might start discussions about slowing interest-rate hikes at their Nov. 2 rate-setting meeting.) Fixed income (4:31) was more mixed. The investment-grade Bloomberg U.S. Aggregate Bond Index gave up 90 basis points (bps). Investment-grade corporate credit likewise was down 90 bps, giving it a year-to-date loss of 23%, worse than the 20% YTD loss of the S&P 500. Notwithstanding a weaker dollar, the Bloomberg Commodities Index (8:29) lost 2% on the week, led by a 22% drop in natural gas.
While covering the week’s macroeconomic news (10:28), Jeff and Sam take issue with Oct. 18 comments by Minneapolis Fed President Neel Kashkari on the labor market and inflation. Among those remarks, Sam questions Kashkari’s attribution of inflation to commodities and supply-chain constraints. Kashkari, Sam says, seems to be “ignoring that stickier part” in core inflation, notably in services, especially the cost of shelter. For their Topic of the Week (20:38), Jeff and Sam examine the National Bureau of Economic Research and its methodology for dating and dividing the U.S. business cycle into periods of expansion and recession.
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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.