Search
Podcast
Markets
Jul 01, 2022 | Monday Morning Minutes

MMM Episode 72: A Red First Half for the Record Books

With the June 30 close of 1H2022, Jeff Mayberry and Samuel Lau start (2:21) by looking at the month, quarterly and first-half-of-2022 returns for the stock market. These left the S&P 500 down just under 20% for the first six months of the year. The best-performing sector for that period was Energy, up 31.8%; the worst performer, Consumer Discretionary, down 32½%. Investors learned the hard way that 60-40 stock bond portfolios offered no protection from the year’s pain. Putting things into perspective, Samuel Lau notes that a proxy constructed by Deutsch Bank (8:15) shows that the 10-year U.S. Treasury in 2022 had its worst first half of the year since 1788. Touring the fixed income landscape (10:38), Jeff and Sam observe the Bloomberg U.S. Bond Aggregate, the widely followed proxy for the high-grade domestic bond market, lost 10.4% in 1H2022, led by a 14.4% loss in investment-grade corporate credit. The podcast discussed (12:40) an almost 11% pullback in June in commodities as measured by the Bloomberg Commodity Index, although that benchmark holds a gain of 18% year-to-date.

In their review of macro news for the week of June 27-July 1 (15:52), the podcast hosts sought to temper people’s take on a hotter-than-expected 1.9% month-over-month gain in April by the S&P CoreLogic 20-City Home Price Index, bringing its YoY return to 21.2%. Jeff Mayberry points out that April excludes the subsequent run-up in mortgage rates. He cautions people to wait for the housing index’s May print. A June “wobble” in the ISM Manufacturing series (17:55) caught Mayberry’s eye. While still in expansionary territory, the ISM Manufacturing index came in at 53.0 versus expectations of 54½. Meanwhile, the new orders component of the index printed 49.2, the first time since the COVID-19 recession of 2020. The market week of July 5-9, although abbreviated, promises to be a charged with macro news (22:24). Reports due include May durable goods (final) on Tuesday; on Wednesday, ISM Services, JOLTS jobs, Federal Open Market Committee Meeting minutes; and Friday nonfarm payrolls and unemployment rates.

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 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.