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DoubleLine Podcasts

MMM Episode 48: 7% CPI, Pricing in 4 Rate Hikes and a Primer on Commodities Futures

After a review of the Jan. 10-14 market activity and macro news, DoubleLine’s Samuel Lau and Jeff Mayberry explain and explore commodities futures for their Topic of the Week (15:46). In that discussion, they discuss the market participants (notably hedgers and producers versus speculators), the important distinction between spot-price returns of commodities versus investable returns afforded by futures contracts, the different exchanges over which commodities futures trade, and the term structures of backwardation and contango, with their respective positive versus negative roll returns.

In their recap of markets for Jan. 10-14 (1:45), energy stocks, up more than 5% for the week, was the sole sector of the S&P 500 to deliver a meaningful positive return. With the exception of energy and communications services, the later up a meager 9 basis points (bps), the remaining sectors were in the red, with real estate stocks down almost 2%. Value stocks, up 1 bp, continued to outperform growth stocks, down 1%. Yields (3:55) were up across the Treasury curve, except for the long bond, which was flat. The largest yield increases at the shorter end of the curve, which tend to be most sensitive to Federal Reserve rate policy. Commodities (5:53) were up 2.25% on the Bloomberg Commodity Index, led by the energy constituents.

The views and opinions expressed herein are as of the date recorded and should not be construed as an offer to buy or sell any securities. Such views/opinions may differ from those of DoubleLine Capital or other of its affiliates and are subject to change without notice. DoubleLine has no obligation to provide any updates or changes. The following audio presentations represent DoubleLine’s intellectual property. No portion of these presentations may be published, reproduced, transmitted or rebroadcast in any media in any form without the express written permission of DoubleLine. DoubleLine has no obligation to provide any updates or changes. To receive permission from DoubleLine please contact [email protected].

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