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DoubleLine Podcasts

S12 E2: Citi’s Alexander Altmann on Fed Policy Hazards, Inflation and Equity Allocation

Alexander Altmann, Managing Director – Americas Head of Equity Trading Strategy, at Citi, joins The Sherman Show to discuss among other subjects his sanguine take on Federal Reserve plans to raise rates but his cautionary view on the risks surrounding Fed balance sheet shrinkage (4:52); the Fed’s policy dilemma in addressing inflation without tanking “America’s ATM,” the S&P 500 (13:50); the advantage of debt leverage to corporations in an inflationary regime (21:16); and valuation multiples rather than earnings as the larger risk to U.S. stocks, particularly growth stocks (26:41). The podcast hosted by Jeffrey Sherman and Samuel Lau was recorded on Feb. 15, 2022.

In terms of equity allocation, Mr. Altmann notes that while the protracted outperformance of U.S. stocks relative to European stocks might have conditioned some to believe in open-ended American exceptionalism, leadership historically has alternated between those two markets, with the last period of “non-U.S. exceptionalism” occurring in 2000-2008 (34:19). Pointing to Citi research showing that U.S. equities represent close to 60% of the MSCI World index but 48-49% of corporate profits, he offers the hypothesis that some of the capitalization of the U.S. stock market might become redistributed to other parts of the world. Within U.S. stocks, Mr. Altmann believes sector selection will play an increasingly important role in investment performance and makes his case for producers of commodities.

Guest Speaker Bio

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].

Neither DoubleLine nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

DoubleLine is not providing any financial, economic, legal, accounting or tax advice in these podcasts. The receipt of these podcasts by any listener is not to be taken as constituting the giving of investment advice by any DoubleLine entity or individual to that listener, nor to constitute such person a client of any DoubleLine entity. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

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