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October 31, 2022 | Monday Morning Minutes

MMM Episode 89: Cooling Housing and a New Yield Curve Inversion

After reviewing a 4% rise in the S&P 500 for Oct. 24-28 (2:19), positive returns across high-grade and risky credit (5:01) and the week’s macro news (12:20), Jeff Mayberry and Samuel a dive into various gauges of the U.S. housing market (19:53). The hosts observe that, while market activity remains elevated, it has been quickly cooling in the wake of rising mortgage rates and more challenging home affordability. During their discussion of fixed income markets, Jeff and Sam note that another widely watched segment of the Treasury yield curve, the three-month bill to the 10-year note, has inverted – for three consecutive days as of Oct. 28. An inversion persisting for at least five days is needed for a credible advance warning of recession. The two-to-10-year segment of the curve has been inverted since July.

The week of Oct. 31-Nov. 4 promises a surplus of macro news releases and with them likely market volatility. Among those reports (34:57), Jeff and Sam will be on watch for the JOLTS Job Openings and ISM manufacturing reports on Tuesday; the Federal Open Market Committee and Fed chairman news conference on Wednesday; the ISM services report on Thursday; and nonfarm payrolls, unemployment and labor participation reports on Friday.

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About the Hosts

About the Hosts

  • Jeffrey Mayberry

    Macro-Asset Allocation

    Jeffrey Mayberry

    Macro-Asset Allocation

    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.

  • Samuel Lau

    Macro-Asset Allocation

    Samuel Lau

    Macro-Asset Allocation

    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.