Monday Morning Minutes: Recent Episodes
DoubleLine
DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau cover a positive Aug. 12-16 week for equities (0:49), fixed income (2:37) and commodities (5:27), supported by tame inflation readings (6:38) for July and surprising strength in retail sales (8:47). The macro ... Read More
DoubleLine Portfolio Manager Jeff Mayberry and Macro Asset Allocation Analyst Mark Kimbrough comment on the whipsaws in stocks, bonds and commodities that by the Aug. 5-9 week’s end left markets little changed. The risk-off selloff that began Friday Aug. 2 ... Read More
DoubleLine Quantitative Analyst Eric Dhall and Macro Asset Allocation Analyst Mark Kimbrough cover a very exciting market week of July 29-Aug. 2, including a very rough Friday for stocks. Eric and Mark review the end-of-week selloff in stocks triggered by ... Read More
DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall survey the markets’ July 22-26 scoreboard for stocks (0:59), fixed income (3:01) and commodities (4:29) before turning to the week’s macro news (5:54). Macroland produced an unequivocally robust preliminary estimate ... Read More
DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall begin their review of the July 15-19 market week with returns in the red for stocks (0:52), bonds (2:18) and commodities (4:01). On the macro front (5:36), Eric Dhall ... Read More
DoubleLine Portfolio Manager Samuel Lau and Macro Asset Allocation Analyst Mark Kimbrough end the week of July 8-12 with a roundup of stock (1:44), bond (4:06) and commodity (6:18) markets. Then they survey the week’s macro news (7:34), including a ... Read More
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall Friday morning review the stock (1:08), bond (3:16) and commodity (5:44) markets for the week ended June 28, 2024. Then they discuss the week’s macro news (7:09), including further evidence ... Read More
DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau cover the markets and macro news for the week of June 17-21, with markets closed Wednesday for the Juneteenth federal holiday. The S&P 500 Index was up on the week, boosted by ... Read More
DoubleLine Portfolio Managers Jeffrey Mayberry and Sam Lau cover the markets and macro news for the week of June 10-14, impacted as they were by the Topic of the Week: the June Federal Open Market Committee meeting and press conference ... Read More
DoubleLine Portfolio Manager Jeff Mayberry and Macro Asset Allocation Analyst Mark Kimbrough cover the June 3-7 market week for stocks (0:31), on the way warning about naïve extrapolations of stock-split returns; bonds (2:42); and commodities (4:15), with energy diverging from ... Read More
DoubleLine Capital Portfolio Managers Jeff Mayberry and Samuel Lau review markets for the week ended May 31, including a rare case of utilities as the leading equities sector year-to-date (1:00), fixed income (7:32) and commodities (9:36). Then they turn to ... Read More
DoubleLine Portfolio Manager Samuel Lau and Quantitative Eric Dhall review a mixed showing the week ended May 24, 2024, for stocks (1:09), bonds (4:04) and commodities (5:47). Turning to macro news (6:57), they note May 1 FOMC minutes show befuddlement ... Read More
DoubleLine Portfolio Manager Jeffrey Mayberry and Quant Analyst Eric Dhall recap a green trifecta for equities, fixed income and commodities for the week of May 13-17, powered by the CPI report, the main macro story. The CPI print was loved ... Read More
DoubleLine Portfolio Manager Samuel Lau and Quant Analyst Eric Dhall kick of their review of the May 6-10 market week combing through a green field of equities. The utilities sector is proving quite the player in 2024 while the leaders ... Read More
DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau review stock (0:57), bond (2:46) and commodity (5:40) markets for the week ended May 3, including notable volatility in equities and fixed income in the wake of inflation data, Fedspeak and jobs ... Read More
For the week ended April 26, 2024, DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau review equities (1:00), fixed income (3:25) and commodities (5:52) markets. Then they discuss the week’s macro news (6:46), including more reports of sticky inflation and ... Read More
As DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau note in their survey of markets for the week ended April 19, both equities as tracked by the S&P 500 (0:52) and fixed income as tracked by the Bloomberg US Aggregate ... Read More
DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall review the market week of April 8-12, for stocks (1:04) and fixed income (5:05). Both asset classes were stung by the April 10’s report of a hotter-than-expected consumer price index ... Read More
After their review of equity (1:08), fixed income (2:20) and commodity (4:14) markets for the week ended April 5 and of recent macro news, DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau for their Topic of the Week (16:14) discuss ... Read More
DoubleLine Portfolio Managers Samuel Lau and Jeffrey Mayberry review the market week of March 25-28, 2024, shortened by the Good Friday holiday. Sam and Jeff also recap March and first quarter performances for equities, fixed income (3:59), commodities (6:24) and ... Read More
For the market week ended March 22, 2024, DoubleLine’s Samuel Lau and Mark Kimbrough recap a mostly positive week for equities (2:39) and fixed income (4:03) while commodities dipped (6:43). For the Topic of the Week (13:20), Sam and Mark ... Read More
For the week ended March 15, 2024, DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau survey the equities (1:17), fixed income (3:20) and commodities (5:44) markets. Then they dive into the week’s heavy macro news schedule (8:10), including CPI, PPI ... Read More
DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau cover a negative week ended March 8 for the S&P 500 (0:48), contrasting with a positive week for that index’s equal-weighted cousin; a positive week (3:16) for all major fixed income sectors; ... Read More
Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall review markets for February (0:47) and the week ended March 1, 2024 (3:31) as well as the week’s macro news (7:00) and Fedspeak (16:51). For their Topic of the Week (19:36), ... Read More
After covering the markets for the holiday-shortened week of Feb. 20-24, mostly positive for stocks (00:18) and bonds (1:52) and mostly negative for commodities (3:30), DoubleLine’s Jeffrey Mayberry and Mark Kimbrough run down a relatively light week of macro news ... Read More
After covering stock (1:01), bond (4:08) and commodity (7:08) markets for the week ended Feb. 16, 2024, DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall dive into the week’s macro news (8:50), including a January CPI report that ... Read More
DoubleLine’s Jeff Mayberry and Eric Dhall review the market week (1:00) ended Feb. 9, 2024, including a new all-time high carrying the S&P 500 to close above 5000 for the first time, yields up across the investment grade segments of ... Read More
After reviewing stock, bond and commodity markets for January (0:54) and for the week ended Feb. 2 (3:07), Jeff Mayberry and Eric Dhall turn to the week’s packed schedule (6:00) of macro news, including Friday’s bond market-displeasing labor market news. ... Read More
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall recap the markets for the week ended Jan. 26, 2024, noting stocks (0:38) were rather tame notwithstanding new highs on the S&P 500, while fixed income (2:03) was largely flat ... Read More
For the holiday-shortened market week of Jan. 16-19, DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau for the Topic of the Week (10:55) look at the Retail Sales Report, an always potentially market-moving print, as retail sales account for about ... Read More
For the week ended Jan. 12, 2024, traditional asset markets, Samuel Lau and Eric Dhall observe, echoed their behavior in 2023, with stocks (1:05) and bonds (3:25) delivering positive returns and commodities ending lower. Sam points out that the U.S. ... Read More
Jeff Mayberry and Samuel Lau start review a somewhat volatile and negative 2024 debut for bonds (0:47) and fixed income (2:13) with commodities (3:55) treading water with a slight rise of 10 basis points on the Bloomberg Commodity Index for ... Read More
DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau Kick off the last episode of 2023 with a yearly performance review of the markets, with equities and fixed income far removed from 2022’s double bear runs. The S&P 500 Index (00:50) ... Read More
After reviewing “everything rallies” for the week ended Dec. 15 in stocks, bonds and commodities, and the week’s macro news, DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau discuss the Dec. 13 monetary policy decisions and guidance of the Federal ... Read More
Jeff Mayberry and Samuel Lau first review the week ended Dec. 8, 2023, for stocks (1:06), fixed income (3:00) and commodities (5:25) as well as macro news (8:12), including volatility around the week’s labor market prints. Then they take up ... Read More
After covering positive market performance in the final week (Nov. 27-Dec. 1) of a very healthy November, DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau dive into the latest BIS paper on financial condition indices as the Topic of the ... Read More
After covering a broad-based positive run in the markets for the week of Nov. 13-17, DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall break down the latest Consumer Price Index (CPI) print (11:35), one that Dhall notes was ... Read More
After reviewing stocks (0:51), fixed income (3:28), commodities (6:14) and somewhat bearish macro news (8:11) for the week ended Nov. 10, DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall cover the latest Fedspeak (14:34), including a bit of ... Read More
After Samuel Lau’s review of markets for month of October (1:29) and the week ended Nov. 3 (2:55) and the week’s macro news (9:25), Jeff Mayberry covers the highlights of Nov. 1 Federal Open Market Committee meeting (21:01) and a ... Read More
Before a dive into the third quarter gross domestic product (GDP) report (15:58), DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall kick things off with a review of financial markets for Oct. 23-27. All sectors of the ... Read More
After covering a mixed week in the markets for Oct. 16-20, DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall break down the concept of “term premium,” which measures the extra amount of yield or spread that bond investors ... Read More
After reviewing stocks (1:17), bonds (2:51) and commodities (4:14) for the Oct. 9-13 market week, DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall cover the week’s macro news (6:42), including somewhat Fed-friendly inflation prints. Based on Fed Funds ... Read More
DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau face the heat outdoors and indoors recapping the red market week of Oct. 2-6 before a timely revisit of recession indicators (16:43). Jeff and Sam take a look at the still inverted ... Read More
Heading into a possible shutdown of the government, Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall survey a bad 3Q2023 (16:48) for stock, bond and commodity returns, but a quarter offering possible opportunities in the wake of wide dispersions ... Read More
Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall review broad losses in stocks (0:59), bonds (2:23) and commodities (4:20) for the Sept. 18-22 market week. Then after checking the week’s macro news (6:57), including a resilient jobs market notwithstanding ... Read More
DoubleLine Portfolio Managers Jeffery Mayberry and Samuel Lau kick off the episode with a nod to the 15th anniversary of Lehmann Brothers’ bankruptcy filing (Sept. 15, 2008) before running down the market week of Sept. 11-15. For their Topic of ... Read More
For the week ended Sept. 8, DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau start with a review of the markets for stocks (0:56), fixed income (3:27) and commodities (4:54), all of which printed with red ink. Turning to the week’s macro news (9:22), they take particular note of the surprisingly strong reading of 54.5 ISM services report for August versus consensus expectations of 52.7. For the Topic of the Week (14:40), Jeff and Sam explore the Treasury quarterly refunding needs, which are running high versus historical averages, and the potential for funding stress in light of such large, expected debt issuance. They also ponder the future reliability of the Secured Overnight Financing Rate (SOFR) as a gauge of financial stress, given the end of the London Interbank Offered Rate (LIBOR). Looking ahead to Sept. 11-15, on Jeff and Sam’s radar screens (28:43) are the August CPI (Wednesday); retail sales, PPI and jobless claims (Thursday); and the University of Michigan survey of 5-to-10-year inflation expectations.
After touring the equities (1:12), fixed income (4:08) and commodities (6:28) markets for Aug. 28- Sept. 1, DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall cover the week’s heavy calendar of macro news (8:07). Highlights include the June readings of the S&P CoreLogic Case-Shiller home price series, which showed home prices, supported by low inventories, defying rising mortgage rates, and labor market data, which, while improving toward a better balance, still indicating Federal Reserve monetary policy remaining tight for longer. Looking ahead to the week of Sept. 4-8 (31:24), Sam and Eric will be on the lookout for ISM Services report and release of the Fed’s Beige Book (Wednesday) and jobless claims (Thursday).
DoubleLine’s Jeffrey Mayberry and Samuel Lau recap the market week of Aug. 21-25, which continued to mark a red monthly run for the S&P 500 (up more than 15% year-to-date (YTD)) (00:43). They also run down fixed income, where the Agg held on to its positive YTD performance (3:05); commodities had a green week except for energy (6:24); and Bitcoin was flat on the week but still up 56% YTD (8:03). Over in Macro Land (8:52), a light week of prints left more room for Fedspeak coverage of Federal Reserve Chair Jerome H. Powell’s speech at the Jackson Hole Symposium (11:30). Jeff and Sam note the Fed’s stance of higher for longer remains in effect while also discussing some comedic and poetic moments courtesy of the Fed chief.
Next week, August will close out with a slew of data releases (18:03), including home prices, the ADP employment report, the PCE deflator and the ISM Manufacturing PMI. This episode was recorded Aug. 25 before market close.
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall begin their review of the week ended Aug. 18 with a rough market for equities (1:18) All 11 sectors of the S&P 500 ended the week in the red. The catalyst for the losses in equities appeared to be higher interest rates (2:46), with the yield of the 10-year Treasury notably breaking above 4.20%. Higher rates (4:22) virtually by definition led to negative returns in many areas of fixed income, including for the Bloomberg US Aggregate Bond Index, the most widely followed gauge of domestic high grade bond performance. Commodities (5:47) shared in the red ink, led lower by energy and industrial metals.
Dominating the relatively light macro news for the week (9:13) were a major property default in China, robust retail sales in the U.S. (albeit possibly skewed by Amazon Prime day), mixed import prices and the release of the minutes of July 26 meeting of the Federal Open Market Committee (FOMC), the monetary-policy setting body of the Federal Reserve. The FOMC minutes (12:57) may have led markets to price in the likelihood of the federal funds rate remaining higher for longer than previously expected. Looking to the week ahead, Jeff and Eric will be especially tuned in to Federal Reserve officials’ comments at their annual retreat at Jackson Hole, Wyoming (17:45), in particular Fed Chair Jerome Powell’s speech scheduled for 7:05 am Pacific/10:05 am Eastern Friday Oct. 25.
After reviewing stock (1:34), bond (4:01) and commodities (6:10) markets and macro news (10:13) for the Aug. 7-11 week, DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau take up the Topic of the Week (16:45): alternatives compiled by the Bureau of Economic Analysis (BEA) to the Consumer Price Index for measuring inflation. These gauges include the GDP Deflator, the Personal Consumption Expenditures Deflator, the GDP Price Index, the Gross Domestic Purchase Index, the PCE Price Index, the Federal Reserve’s preferred Core PCE and the rather obscure Market-Based PCE. Then Jeff and Sam turn to macro news releases (29:23) scheduled for the Aug. 14-18 week.
DoubleLine’s Eric Dhall and Mark Kimbrough run down market performance for July before diving into a recap for the week of July 31-Aug. 4. For the month, equities (00:54) delivered a pretty nice return while over in fixed income (2:12), the U.S. Treasury curve had a somewhat interesting period, and the Agg finished down a few basis points. Commodities had a healthy run (3:51), led by a gangbusters energy sector and a green agriculture sector. On the week (5:49), equities were down, and the long end of the Treasury curve was up.
Over in Macro Land (8:51), the week delivered quite a few prints, including senior loan officers’ outlook for tightening lending standards, an upside surprise in second quarter productivity (12:12) and a Jobs Friday (16:44) report that sparks talk of a “full-employment recession.” This week’s Fedspeak (20:52) coverage includes speculation of the “Barbie” box office buoying prospects for an economic soft landing. Next week’s prints (22:22) will include CPI and PPI numbers as well as the University of Michigan Consumer Sentiment Index, one of the metrics Fed Chair Jerome H. Powell has been keeping an eye on. This episode was recorded before market close Aug. 4, 2023.
DoubleLine Portfolio Manager Samuel Lau first covers the week of July 24-28 in terms of stocks (1:40), fixed income (3:49) and commodities (6:52). Then Macro Asset Allocation Analyst Mark Kimbrough reviews the week’s macro news (9:49), noting resilient housing prices in the face of rising mortgage rates. For the Topic of the Week (16:31), Sam and Mark discuss the Federal Open Market Committee meeting, its rate decisions and guidance, and Federal Reserve Chair Jerome Powell’s news conference. Speaking to reporters, Powell, Samuel Lau notes (19:29), “continued to highlight price stability as being important for strong labor conditions for all.” Thus there’s a bias toward the inflation side of the Fed’s dual mandate and a willingness “to suffer a little softness in labor conditions to order to get in line with price stability.” Turning to macro conditions for the business week ending Aug. 5 (29:09), Mark Kimbrough has on his radar the senior loan officer opinion survey (Monday); the JOLTS job survey, a metric important to Chair Powell (Tuesday); the ADP employment report (Wednesday); the ISM Services survey (Thursday); and labor market reports, including nonfarm payrolls, U-3 unemployment rate and labor force participation rate (Friday).
DoubleLine’s Jeffrey Mayberry and Samuel Lau recap a very positive market week of July 17-21 as green screens throw some shade at the summer doldrums. Equities continued to roll, with all 11 sectors of the S&P 500 positive month-to-date (2:07), fixed income was up on the week before market close, with IG corporate credit a notable performer (4:21), commodities continued to move in a positive direction for the week and month, helping to erase their negative performance year-to-date (6:33) and Bitcoin was positive but relatively quiet (10:20). It was a very quiet week in Macro Land leading into next week’s FOMC meeting – so no Fedspeak to parse (10:50). Prints included retail sales, jobless claims and an LEI that maintains we are in a recession. Next week’s macro (14:41) will very likely bring another Fed rate hike as well as delivering the first estimate for second quarter GDP and data from two of Fed Chair Jerome H. Powell’s favorite metrics: the Employment Cost Index and the PCE deflator. Jeff and Sam close the episode with a discussion of what seems like a reflowering of the optimism that first bloomed in winter 2023 after the calendar turned on a brutal 2022. (18:23)
DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall tour market and macro news for the July 10-14 week, then look into the week ahead. The discussion begins with markets, including U.S equities (2:02), fixed income (4:08), commodities (6:15), the U.S. dollar (6:59), gold (7:31) and Bitcoin (7:47). The macro news (8:13) was dominated, as Eric Dhall notes, by a “trifecta of beats” on the inflation front, with the CPI and PPI showing lower-than-expected inflation in June and import prices showing outright deflation. The podcast hosts, however, tempered that news with the observation that if housing prices remain resilient, core consumer inflation (ex-food and energy) could find a floor at 3% year-over-year. Looking ahead to the July 17-21 week (23:09), Sam and Eric have on their radar retail sales and industrial production (due Tuesday), initial and continuing jobless claims (Thursday) and the recession-flashing Leading Economic Index (Thursday).
DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau review market performance of the week ended July 7 for equities (2:27), fixed income (3:44) and commodities (8:42). Then they turn to the week’s macro prints (12:03), among other observations noting the ongoing split personality of the U.S. economy with robust services and weakening manufacturing. Pricing in the futures market (16:43), Jeff and Sam remark, puts the probability of a quarter point hike in the federal funds target rate at 89% at the July 26 meeting of the Federal Open Market Committee, the policy-setting body of the Federal Reserve. For the week of July 10-14 (20:58), Jeff and Sam will be particularly focused on June CPI report, due Wednesday, and comments by Fed officials, in particular, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis.
DoubleLine’s Jeffrey Mayberry and Samuel Lau on the final day of June review the markets for the week of June 26-30 and also provide performance snapshots for the month, second quarter and year-to-date. After bidding farewell to LIBOR*, Jeff and Sam discuss the S&P 500’s performance (3:05), including the big performers and laggards as well as the healthy shot in the arm from AI companies. In their recap of fixed income (8:44), they discuss the Rip Van Winkle effect in regard to 10- and 30-year U.S. Treasuries despite some large fluctuations amid March’s banking crisis. It was a rough half-year for commodities (14:24) while Bitcoin’s performance (up 85%) looms large (16:31).
Over in Macro Land (17:12), quarterly GDP numbers are starting to look stronger than expected while the week also delivered a mixed bag of economic numbers, including prints on home prices, jobless claims, personal income and savings, and the latest PCE. Next week (23:11), which includes the Fourth of July holiday, will deliver the June FOMC meeting minutes and JOLTS numbers, and we’ll see where the manufacturing and services prints land in terms of expansion and contraction.
*If you would like to hear more on the history of LIBOR and why it was shown the door, check out: https://podcasts.apple.com/us/podcast/mmm-2021-mar-week-3/id1556154252?i=1000513939317
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall cover the June 19-23 week’s performance in equities (1:57), fixed income (3:19) and commodities (5:04), then digest bearish readings (7:11) in the latest initial jobless claims report and reading on the Leading Economic Index. Afterward Jeff Mayberry reviews Jerome Powell’s testimony before Congress (12:33), noting that pricing in the futures market reflects skepticism over the Fed’s ability to make good on the Fed chair’s guidance for two more hikes in the fed funds target rate. On Eric Dhall’s watch list (16:00) for the week of June 26-30 are durable goods and the S&P CoreLogic Case-Shiller 20-city house price index (Tuesday), wholesale inventories (Wednesday), third quarter GDP estimate and jobless claims (Thursday) and personal income and personal spending (Friday). Jeff Mayberry expects that heavy schedule to whip up heightened market volatility.
After a rundown of the markets and macro news for June 12-16, DoubleLine’s Jeffrey Mayberry and Samuel Lau cover the June FOMC meeting and Federal Reserve Chair Jerome H. Powell’s press conference (15:31). The federal funds rate remained unchanged, and Sam goes through what that meant for the interest charged on reserves, the overnight reverse repo facility*, the amount available to borrow at the banking window and the caps on quantitative tightening (QT). He then recaps the Summary of Economic Projections (17:32), which maintains the Fed’s hawkish stance on potential tightening (a position echoed in post-meeting Fedspeak (13:12)). Jeff then runs down Powell’s Other Way ’Round Bro press conference (20:57), where in a break from tradition Powell’s comments bolstered market activity as the event went on. Jeff discusses how similar Powell’s language was to the last press conference, flagging exceptions such as the Fed chair’s parsing of “skip” and “pause” in regard to the June rates decision. Once again, Powell masterfully avoided any answers on QT policy.
In the breakdown of the market week, Sam notes that risk assets really liked Wednesday’s Fed move (2:11), with the S&P 500 surging, while fixed income shrugged off the hike break (4:36). Commodities scored their second up week in a row (6:52) and Bitcoin was flat (8:25). Macro Land (9:18) had a very busy week beyond the FOMC meeting, including CPI and PPI prints as well as retail sales numbers and jobless claims. Next week’s holiday-shortened week will bring a run of Fed officials speaking in public (32:43). This episode was recorded before market close on June 16, 2023.
*For more on the overnight reverse repo facility, check out: MMM Episode 112: Red Week, Recession Metrics and the Overnight Reverse Repo Facility
DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau cover the June 5-9 results for stocks, including a rebound for regional banks (2:41); fixed income (4:11), a bit of pressure on duration, gains for emerging market debt and bank loans; commodities, their first positive week in about two months (8:50). It was a quiet week for macro news (13:29). One of the few notable prints was a sluggish ISM Services PMI report. The May survey came in at a barely expansionary 50.3 vs. a consensus expectation of 52.4. Samuel Lau notes that the Services PMI has been trending lower in recent months. Next week promises a busier news calendar (16:40). With the futures market pricing 30-70 odds of a hike or pause in the federal funds rate, Jeff Mayberry notes the May CPI report due Tuesday June 13 will likely be a market-moving event. After the release of the May PPI on Wednesday, the Federal Open Market Committee, the rate-setting body of the Federal Reserve, meets.
DoubleLine’s Jeffrey Mayberry and Eric Dhall welcome the arrival of graduation time and the start of MMM’s summer stretch before recapping the Memorial Day holiday-shortened market week of May 30-June 2 as well as looking at May performance. All sectors of the S&P 500 closed up for the week, and the index closed up in May (2:23). Fixed income had a pretty sizable week with the Agg down for the week and in May but still up year-to-date (4:12). Commodities were flat (5:59), and Bitcoin (6:59) was up for the week. Over in Macro Land (7:36), it was a pretty wild week with the debt-ceiling deal in D.C. the main driver of activity. Among the week’s other prints, the S&P CoreLogic Case-Shiller home price index delivered rosy data, but the numbers were from March (9:18); consumer confidence waned (10:26); labor market numbers were strong (11:13); and the ISM manufacturing print remained contractionary (13:08). In this week’s Fedspeak segment, Jeff and Eric look for clues on the FOMC’s plans for its June meeting (18:05).Next week’s deliveries (19:42) will include an OPEC Plus meeting, two services prints and jobless claims.
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall review the performance of stocks (2:23), bonds (4:47) and commodities (6:39) for May to date; a complicated mix of macro news (13:34) for the week ended May 26; and expectations reflected in the futures market of a 25-basis point hike in the federal funds target rate on June 14 or July 26 (13:33). Then Jeff decodes the message that Treasury bill yields are sending on the prospects of a failure or agreement by Washington to raise the U.S. debt limit before the federal government runs short of cash (18:03). Looking ahead to the Memorial Day-abbreviated market week ending June 2, the hosts single out for investors’ radar prints of the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index, JOLTS Job Openings, jobless claims, ISM Manufacturing, nonfarm payrolls and unemployment (22:50).
After a recapping the mixed market week of May 15-19, DoubleLine’s Jeffrey Mayberry and Eric Dhall take on a Topic of the Week that looks at the in-the-headlines banking industry (13:04). Jeff begins the ToC section with coverage of a Federal Bank of New York blog post with some interesting data on banking deposit activity from March 2022 to March 2023, when outflows accelerated amid the banking crisis. While that period marked almost $1 trillion in outflows, the activity was concentrated in the super-regional sector. That information leads to the question of the week: Does it matter to the banks if they have excess reserves? Will profitability go up if they have less deposits to pay for? (19:39) Jeff responds with a look at the need for the super-regionals to now pay put more to retain their deposits and what that means in terms of levering up. When not in a Fed tightening cycle, deposits are a very cheap form of having assets.Looking at the markets, the S&P 500 was up on the week (1:50) while the Agg was down (3:17). It was a light week in Macro Land (6:41), with retail and industrial numbers and a recession-flashing LEI print. Fed Chair’s Jerome H. Powell’s sitdown with former Chair Ben Bernanke offered up some prime Fedspeak (9:57), with Jeff and Eric discussing the event and its impact on the markets. Next week will deliver a lot of data (22:10), including PMI and personal income and savings numbers as well as the April PCE print.Bank Funding During the Current Monetary Policy Tightening Cycle
After a red-week rundown, DoubleLine’s Samuel Lau and Eric Dhall turn the Topic of the Week spotlight on the Senior Loan Officer Opinion Survey (SLOOS) (13:22), another economic metric enjoying a higher profile after being name-checked by Federal Reserve Chair Jerome H. Powell. Sam and Eric discuss how this survey, which tracks such data as the tightening of lending standards at banks, has been consistently used at DoubleLine, and the survey’s history, how it functions and the information it provides (17:20). The two then go over the sections in the most recent survey (21:49), including business lending, household/consumer lending and special topics.It was a red run for stocks (2:04) and fixed income (2:48) for the May 8-12 market week, with the respective benchmark S&P 500 and Bloomberg US Aggregate Bond indexes each down about a quarter point. Commodities and Bitcoin were also down (4:18). Over in Macro Land (6:15), the week’s activity included wholesale inventory and trade prints, the lowest NFIB Small Business Optimism Index number since January 2013 (7:02), jobless claims that could be trending up (8:43) and a University of Michigan Consumer Sentiment Index reflecting growing frustration with stagflation (11:08). Next week’s light schedule (33:40) will include retail numbers and an LEI that has already been flashing recession.
After reviewing the May 1-5 performances of stocks (2:38), fixed income (3:50), commodities (5:41) and the week’s macro news, DoubleLine’s Samuel Lau and Eric Dhall take a dive (13:51) into the May 3 meeting of the Federal Open Market Committee (FOMC), its policy decisions and guidance as well as Federal Reserve Chair Jerome Powell’s news conference. Their Fed Day analysis includes some skepticism about Powell’s stated reassurances on the health of the banking system but also some empathy for the economic conjuncture in which Powell finds himself as the Fed seeks to tame inflation.Looking ahead to the upcoming macro news releases for the market week starting May 8 (31:29), the cohosts single out the April consumer price index, Tuesday May 9; the producer price index, Thursday; the University of Michigan preliminary May consumer sentiment survey, Friday; and Fedspeak events featuring New York Fed President John Williams; Christopher Waller and Philip Jefferson, both members of the Fed’s Board of Governors; and St. Louis Fed President James Bullard.
After reviewing a mostly green market week (and month and year-to-date) of April 24-28, DoubleLine’s Jeffrey Mayberry and Samuel Lau take a look at what a difference a day makes with their Topics of the Week. Jeff and Sam begin the segment by looking at zero-days to expiry (0DTE) stock options (21:19), with investors’ growing interest having already produced mixed opinions from “nothing to see here” to the “next Armageddon.” The two cover the history leading up to 0DTE, retail investors’ exposure (30:37) and generally see a pretty balanced market with not much reason for concern (27:35). Next up (28:29) is the CBOE’s new 1-Day Volatility Index (VIX1D), unveiled by CBOE as a companion to its VIX, which measures stock market expectations of volatility based on S&P 500 index options on a 30-day basis and is referred to as the fear gauge. Jeff and Sam discuss the new index’s operation and the short and simple breakdown provided by the CBOE on the VIX1D, wonder if the VIX1D’s popularization of “business minutes” will lead to talk of “business seconds,” and they look forward to tracking the new index’s reactivity to next week’s speech by Fed Chair Jerome H. Powell at the FOMC meeting. The Topic of Week segment concludes with a quick check-in on the status of the 2s10s spread (37:20).Stocks (1:52) and the Agg (4:55) posted strong performances in April while commodities (6:25) struggled and Bitcoin (9:00) maintained its strong year-to-date return. Over in Macro Land, Jeff and Sam look at data prints including home prices (9:43); preliminary GDP (12:05); and the Fed’s report on the collapse of Silicon Valley Bank (15:37 ), in which, Sam notes, the Fed does not fully acknowledge the extent of its failure. Looking to next week (40:16), the big event is the FOMC meeting, which is expected to bring another quarter-point rate hike.For more on options and Witching Hour(s), check out MMM Episode 36**For more on the Volatility Index, check out MMM Episode 49
After reviewing a mostly down market week of April 17-21, except for bank loans, DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau take a look at the Federal Reserve’s Overnight Reverse Repo Facility at the behest of a listener (11:37), specifically, how does operating the facility benefit the Fed. Sam lays out how the facility supports the Fed’s monetary policy and how the facility works to maintain the range of the Fed’s effective federal funds rate. Sam also looks at whether the Fed could discontinue the facility, which he says right now would run counter to the Fed’s goals (23:33).In their rundown of the week (2:29), Jeff and Sam report on a flat S&P 500, and a down week for fixed income (3:36), commodities (5:08) and Bitcoin (7:09). Over in Macro Land (7:25), they look at jobless claims, LEI data that says we are not headed toward a recession but are in one (8:37), and manufacturing and services PMI prints that were both expansionary for the first time since June (9:23) (and the stock market didn’t care). In their roundup of Fedspeak (10:13), officials all pointed to tightening. Next week’s data (30:49) will include home prices, the first GDP estimate, jobless claims and the PCE deflator.For more on how the facility operates, check out MMM Ep. 18, “The Purpose of the Fed’s Overnight Reverse Repo Facility”
Portfolio Managers Jeff Mayberry and Samuel Lau with guest and DoubleLine Macro Asset Allocation Analyst Mark Kimbrough start with a review for week ended April 14 of stocks (including a look at banks) (2:24), fixed income (5:02), commodities (6:27) as well as the week’s macro news (8:48) and Fedspeak (17:45). For the Topic of the Week (20:29), Jeff and Sam dig into the details of the weekly initial and continuing jobless claims made for unemployment insurance benefits. Looking to the week of April 17-21 (32:23), Jeff, Sam and Mark have on their radar, among other items, more Fedspeak events, the release of the Federal Reserve’s Beige Book (Wednesday April 19), the Leading Economic Index of 10 leading indicators (Thursday) and the S&P Global Manufacturing and Services PMIs (Friday).
After reviewing equities (3:03), fixed income (3:44), commodities (6:50) and macro news (11:25) for the abbreviated market week ended April 6, Jeff Mayberry and Samuel Lau discuss the basics of interest rate risk (16:23), aka duration, including its impacts on investor portfolios as well as banks. They also delve into the relationship between coupon levels and duration, the types of securities to use to benefit from falling yields in an anticipation of recession, and the use of longer duration government securities to offset credit risk in a portfolio. Among macro data points in the days ahead (26:50), Jeff and Sam cite payrolls, unemployment rate and labor participation rate for March due Friday April 7; Federal Open Market Committee minutes and Consumer Price Index for March, Wednesday April 12; Producer Price Index, Thursday April 13; and University of Michigan consumer inflation expectations survey and retail sales, Friday April 14.
After recapping positive market performance for March and the quarter, DoubleLine’s Jeff Mayberry and Sam Lau turn to the Topic of the Week: how commercial real estate (CRE) lending will be impacted by the recent issues at regional banks (20:36). Sam begins by laying out the size of the role that regional banks play in the CRE lending space (22:19) before Jeff & Sam get into DoubleLine’s overall outlook (24:57): the cost of financing will go up for those seeking capital. The two in particular discuss the $2.5 trillion in CRE loans coming due in the next five years and what options such as modifications and strategic default will be available for lenders and borrowers, with Sam and Jeff noting that loans will be handled on a case-by-case basis due to idiosyncratic factors.The final market week of March (27-31) assisted monthly and quarterly performance for equities (2:18), fixed income (4:53) and Bitcoin (11:24). The broader commodities market (8:40) missed out on the green quarter. Macro Land received a lot of numbers for the week, including home prices (11:57), jobless claims (13:08), a PCE print (14:07), inflation expectations (15:32) and the Fed balance sheet (16:01). Jeff also shares some choice Fed official quotes (17:10). Next week will also be a busy data week (36:42), with Jeff and Sam getting prints for manufacturing and services PMI, JOLTS, jobless claims and nonfarm payrolls. MMM will be recording and releasing this Thursday due to the Good Friday holiday.For more on Jeff & Sam’s thoughts on the regional banking crisis, check out MMM 106: March Madness Shakes Up a Couple Banks
After reviewing a March 20-24 market week that brought a little bit of green, DoubleLine’s Jeff Mayberry and Sam Lau recap and review the Federal Open Market Committee’s March meeting as well as Fed Chair Jerome H. Powell’s press conference (14:30). Sam runs down changes to the FOMC’s Summary of Economic Projections (19:06) and dot plots (21:02), including speculation on the identity of the FOMC member projecting a federal funds rate of 5.9% at the end of 2023 (the median was 5.1%). Jeff breaks down Powell’s press conference (23:07), which kicked off with a focus on the banking crisis. Conference highlights include Powell’s projection of confidence, his insistence that the current balance-sheet expansion is temporary lending to banks and not QE (25:38), Powell’s assertion that all depositors are safe and how that squares with what Treasury Secretary Janet Yellen has been saying (27:50) and his harsh words for SVB management (30:11).In the rundown of the market week (1:54), Sam reports some positive performance for the S&P 500, the Agg and Bitcoin. Over in Macro Land (10:08), Jeff talks a steady jobless claims report, PMI numbers that could be pointing to a pickup in manufacturing and the Fed’s balance-sheet numbers, among other topics. Next week (35:13) will bring some numbers on home prices, personal income and spending, and the latest print of the Personal Consumption Expenditures Price Index. Fed Vice Chair Michael S. Barr is also scheduled to speak before Congress on the banking crisis. This episode was recorded after market close March 24, 2023.
After their review of markets (1:08), DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau discuss a seeming disconnect (6:49) between falling bond yields and rising stocks amid market-roiling bank news the week of March 13-17. In their review of the week’s macro news (9:28), Jeff notes inflation remains high, taking together the February consumer and producer price indexes. For their Topic of the Week (18:08), Jeff and Sam again look at the historical record of yield curve inversions as leading indicators of recessions. In particular, they analyze the lead times between the start of past inversions, their maximums and, post inversion, de-inversions versus the onset of recessions. Among upcoming macro developments (29:22), Jeff and Sam of course will be watching the Federal Reserve’s rate decision on Wednesday March 22 and guidance coming out of the Federal Open Market Committee and from Fed Chair Jerome Powell’s news conference.For more background on the yield curve, other leading indicators and recession dating, Jeff and Sam suggest listening to the following Monday Morning Minutes episodes in chronological order:Yield Curve:Episode 11, 4/16/21, Real and Nominal Yield Curve & Steepness - https://doubleline.com/markets-insights/mmm-recap-of-the-april-12-16-market-week/Episode 52, 2/11/22, Yield Curve and Recessions - https://doubleline.com/markets-insights/mmm-episode-52/Episode 59, 4/1/22, Real YC, Recession Indicator- https://doubleline.com/markets-insights/mmm-episode-59/Episode 97, 1/6/23, 3mo 10y - It's Different This Time - https://doubleline.com/markets-insights/mmm-episode-97/Other Recession Indicators:Episode 82, 9/7/22, Recession Indicators - https://doubleline.com/markets-insights/mmm-episode-82/Episode 88, 10/21/22, NBER and Recessions - https://doubleline.com/markets-insights/mmm-episode-88/Episode 98, 1/13/23, Recession Indicator Update - https://doubleline.com/markets-insights/mmm-episode-98/
Jeff Mayberry and Samuel Lau survey the March 6-10 week’s losses in stocks (2:01), risky credit (5:03) and commodities (5:26) and rallies in high-grade fixed income, as well as the week’s macro news (6:30). Then in the wake of two bank failures during the week, they explore the history of bank runs (12:21) and the takeover and disposition of failed insured institutions by the Federal Deposit Insurance Corp. Looking ahead to March 13-17 (33:54), Jeff and Sam will be on the lookout of the February Consumer Price Index (Tuesday), Producer Price Index and retail sales (both Wednesday) and the University of Michigan 5-10-year inflation expectations survey (Friday).
DoubleLine Portfolio Manager Jeff Mayberry and guest host Quantitative Analyst Eric Dhall March 3, 2023, examine the month of February, which reversed the January gains for stocks (2:17) and for bonds (4:35). Seeing a possible silver lining, Eric Dhall notes the volatility in bonds “is giving investors another opportunity” to lock in portfolio holdings at “these higher rate levels.” They next review macro news (9:25) for the week ended March 3, including evidence of the pressure of higher interest rates on the housing market and the message from fed funds future pricing regarding the expected peak rate in the fed funds. For the Topic of the Week (18:58), Jeff and Eric explain the construction and function of diffusion indexes, in particular, the PMI manufacturing and services surveys, and those surveys’ effectiveness in measuring economic strength and weakness. Looking ahead to the week of March 6-10 (29:01), they will be looking out for the JOLTS jobs survey (Wednesday March 8), initial jobless claims (Thursday) and nonfarm payrolls and labor force participation rate (Friday).
After reviewing a red week ended Feb. 24, 2023, for stocks (1:57), bonds (3:11) and commodities (4:39) and the week’s macro news (7:04), Jeff Mayberry and Samuel Lau look under the hood (15:07) at “Super Core Inflation,” Fed Chair Jerome Powell’s metric du jour for gauging consumer price inflation and presumably setting the federal funds interest rate. This metric tracks the subset consumer services prices remaining after stripping out housing. What’s left represents only about a quarter of the headline Consumer Price Index. Sam Lau opines that amounts to “a pretty small chunk of the inflation basket to guide monetary policy.” Giving the Fed the benefit of the doubt, Jeff Mayberry notes the central bankers have developed narratives around disinflation in goods prices and an outlook for cooling housing costs, but they have no disinflation for services ex-housing.Then Jeff and Sam list the macro news due the week of Feb. 27-March 3 (28:25). These include durable goods and the S&P CoreLogic Case-Shiller house price indices (Monday), consumer confidence (Wednesday), a Neel Kashkari speech and ISM manufacturing (Wednesday), a Christopher Waller speech (Thursday) and ISM services (Friday).
Jeff Mayberry and Samuel Lau review a red Feb. 13-17 week for stocks (1:55), bonds (3:28) and commodities (6:01) as well as the week’s macro news (6:01), including signs of slowing CPI disinflation and PPI prints well above expectations that jolted markets. Then for their Topic of the Week, Jeff and Sam investigate (15:26) congressionally mandated sales of crude oil from the Strategic Petroleum Reserve (SPR). A U.S. Department of Energy news release on Feb. 13 announced a forthcoming 26-million-barrel sale from the SPR. The communiqué stirred up a degree of angst in the commodity markets, although Sam and Jeff that explain the sale had already been voted by Congress.Looking ahead to the abbreviated market week of Feb. 21-24 (31:46), the Monday Morning Minutes hosts have on their radar the S&P Global manufacturing and services PMI surveys (due Tuesday), release of the minutes of the Feb. 1 meeting of the Federal Open Market Meeting (Wednesday), personal spending (Thursday) and the Personal Consumption Expenditure deflator (Friday).
After reviewing the very red markets week of Feb. 6-10, DoubleLine’s Jeff Mayberry and Sam Lau discuss changes to the U.S. Bureau of Labor Statistics’ methodology in calculating the Consumer Price Index (CPI) as The Topic of the Week (13:05). The first of two changes that will be in place for January’s print (coming out on Valentine’s Day this Tuesday) concerns a shift from using two years of data points to only one year of data points to compute CPI. Jeff notes this will mean a reliance on faster-moving data points, and he adds this change will mean that the first COVID-19 year of 2020 will be excluded from 2023 CPI prints. Both Jeff and Sam look forward to seeing how this change will be adapted into bullish and bearish readings of Tuesday’s CPI print. The second change concerns seasonality factor adjustments (20:03), which means that CPI prints from the first part of 2022 are now lower, and prints from the latter part of the year are higher.January’s positive performance was reversed in the first full week of February with red pretty much across the board (2:25). It was a light week in Macro Land (7:48), with jobless claims higher than expected, and University of Michigan inflation expectations flat. On the Fed front (9:05), Chair Jerome H. Powell offered some insight into the FOMC process in a sit-down interview, and two governors pushed a rates-higher-for-longer message. In addition to CPI, next week’s data prints will include producer prices and the Leading Economic Index (23:51). This episode was recorded after market close on Feb. 10, 2023. Go Rihanna!
DoubleLine Portfolio Manager Jeff Mayberry is joined on Monday Morning Minutes by Quantitative Analyst Eric Dhall to recap the market week of Jan. 30-Feb. 3 as well as January performance. But most important, the two break down the Federal Open Market Committee meeting and Fed Chair Jerome H. Powell’s press conference as the Topic of the Week (16:16). The hike of 25 bps didn’t impact the markets too much, note Jeff and Eric, who speculate that Powell’s dovish demeanor might have stoked optimism in contrast to a hawkish tone more apparent in the transcript of his speech. The two also run through Powell’s Q&A (19:47), with topics including how the Fed interprets financial conditions, the state of the disinflationary process, “super-core” inflation and housing services, and stop-and-go rate hikes. QT was actually brought up in a question about the debt ceiling, with Powell’s deft dodge of the subject drawing praise from Jeff (26:30).In their market coverage, Jeff and Eric run down a pretty volatile week that followed a pretty good January (1:45). In Macro Land (6:30), a rich week of data included negative housing and manufacturing prints alongside historically healthy labor market numbers, which could further complicate Fed moves in its inflation fight. Looking ahead (28:51), next week will be light on data, but a sit-down with Bloomberg News will provide Powell a chance to rewrite (if necessary) his FOMC remarks.
In addition to recapping market events for the week of Jan. 23-27, DoubleLine’s Jeff Mayberry and Sam Lau mark the 100th episode of Monday Morning Minutes expressing much gratitude to the listeners as well as the firm’s staff and resources that make the podcast possible (14:28). Jeff and Sam share some of their favorite Topics of the Week, including such diverse subjects as the Fed’s overnight reverse repo facility, preferred securities, the supplementary leverage ratio and the hosts’ favorite books. Many of the topics remain particularly pertinent to today’s market environment.For the market week, “the worst shall be first” continued to hold true in the first month of 2023, as consumer discretionary and consumer services, big laggards in 2022, have been strong performers in the equities sector (02:01). In fixed income (4:18), Treasuries were up across the curve while the worst-to-first baton was carried by emerging markets and investment grade corporate credit. Commodities were down for the week (7:23), gold was flat (8:19), and Bitcoin was basically flat for the week but way up on the year (8:36). Over in Macroland (9:15), Jeff and Sam review an LEI print that points to recession, contractionary PMI numbers (9:53) and PCE data that should make the Fed happy (12:06).Next week (32:27) will bring reports on home price appreciation and the labor market in addition to another FOMC press conference from Fed Chair Jerome H. Powell, which Jeff and Sam will break down in detail.Thanks again for supporting MMM through its first 100 episodes!
Jeff Mayberry and Samuel Lau review stocks (2:39), fixed income (5:09), commodities (7:14), macro news (8:54) and Fedspeak (11:42) for the week ended Jan. 20, 2023. Then for their Topic of the Week (16:15), they explore the measurement of food prices, including significant divergences between international and U.S. metrics measuring the cost of food. In their preview of economic data prints for the week of Jan. 23-27 (32:38), Jeff and Sam say they will be watching for the Leading Economic Index on Monday; the S&P Global manufacturing and services PMIs, Tuesday; fourth quarter U.S. GDP, Thursday; and especially the Federal Reserve’s favorite inflation gauge, the PCE Core Deflator, Friday.
After scoring a largely up week for stocks, fixed income, commodities and even Bitcoin, Jeff Mayberry and Samuel Lau, finding little in the way of market-moving news for Jan. 9-13, review a raft of inflation gauges (7:23), after the December CPI earlier in the week met expectations. Then they update their favorite recession indicators (14:47), which have worsened since their last review of these in September. Looking ahead to the holiday-abbreviated week of Jan. 17-20 (26:18), Jeff and Sam cast their gaze on retail sales, the December PPI and the Fed’s beige book release, due Wednesday; jobless claims, due Thursday; and scheduled Fedspeak events.
After recapping a mostly green market performance and mixed macro bag for the holiday-shortened first week of the year (Jan. 3-6), Monday Morning Minutes hosts Sam Lau and Jeff Mayberry kick off the 2023 Topics of the Week with a look at the spread between the yield of the three-month note and 10-year bond (13:18), and how the spread’s inversion is used by some as a recession signal with a prediction record of 8-for-8. The model’s creator, Dr. Campbell Harvey of Duke University, has been in the news recently discussing why (possibly) This Time Is Different and how the spread’s inversion in 2022 might not be pointing to a recession. Sam and Jeff run through Dr. Harvey’s four reasons: knowledge of the model might be impacting behavior (20:05), the healthy labor market (25:31), the strong consumer (29:16) and the Federal Reserve’s already hawkish stance on inflation (29:54).In their review of a shortened market week, Sam and Jeff hope the new year’s green shoots hail a reversal of a rough and red 2022 (1:38). Equities, fixed income and Bitcoin were all up with only commodities sitting out the surge. On the macro front (8:08), mixed signals were sent, including contractionary ISM manufacturing and services data and JOLTS numbers continuing to reflect a strong labor market. Next week will be light on data releases aside from the tightly watched CPI print (33:32).For more on the U.S. Treasury yield curve and its use in recession indicators, check out:MMM Episode 59: Real Yield Curve and U.S. Men’s SoccerMMM Episode 52: Yield Curve Flattening as an Economic Indicator
DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau review 2022 in their year-end podcast. They start with stocks (1:55) and then turn to fixed income (5:42), noting the rare coincidence of bear markets in both asset classes produced the second worst year on record (9:16) for 60-40 stock-bond portfolios. Of the major asset classes, commodities (11:54) was the rare exception to the red ink, with the Bloomberg Commodity Index up 38% YTD in the first half of the year in part on the Russia-Ukraine conflict and before settling back to a calendar-year gain of 16%. Jeff and Sam also cover the week’s macro news (18:20) and preview a busy if abbreviated week of macro data releases (21:22) coming Jan. 3-6 in the New Year.
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall run down a Dec. 12-16 market performance that shifted in the wake of Wednesday’s FOMC rate hike. Equities perhaps partied too hard Wednesday after the Fed delivered only a 50-basis-point hike, closing out the week down while rates rallied across the U.S. Treasury curve (1:56). The BCOM marked a tiny boost for commodities, and it looks like Bitcoin might miss out on a holiday bonus this year (5:45). On the macro front, November CPI was down versus expectations (7:27) but the FOMC meeting was the news event of the week. For their Topic of the Week (13:12), Jeff and Eric review the FOMC rate hike and market reaction, including the Dow’s real-time response to Fed Chair Jerome H. Powell’s speech. The pair also read the dot-plot tea leaves with a look toward next year and beyond, and they review some of the more intriguing questions and answers at Chair Powell’s press conference. The episode closes with a lengthy list of data prints to keep an eye on (26:35), as the show will take off Dec. 23 before returning Dec. 30 for a year-end roundup!Happy Holidays From Monday Morning Minutes!
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall start with a review the Dec. 5-9 week’s red ink in stocks (1:41), higher yields for bonds (2:43) and more red ink in commodities (4:21), the latter led lower by energy with oil down to $75.10 a barrel, making a new low for 2022. For their Topic of the Week, the hosts dissect the Producer Price Index (13:15), compare its differences with the Consumer Price Index and discuss the PPI’s uses and limitations as a predictor of price trends. Looking ahead to the week of Dec. 12-16 (23:36), Jeff and Eric will be on watch for the November headline and core CPI reports on Tuesday and import prices on Wednesday ahead of meeting of the Federal Open Market Committee the same day amid market expectations of a 50 basis point hike in the federal funds target rate.
Jeff Mayberry and Samuel Lau first survey (2:30) the performance of financial markets, including the alliterating Lau’s “podium of positive performers”: the four sectors in the S&P 500 that now show positive returns year-to-date. Then they turn to the major macro and market news (14:32) for the two weeks ended Dec. 2, 2022, notably a contractionary reading on the S&P Global manufacturing survey and a persistently tight readings for the labor market. For their Questions of the Week, they start by refreshing their take (25:17) on what Jeff considers the Biden administrations “short-sighted” releases from the Strategic Petroleum Reserve. (For Jeff and Sam’s detailed introduction to the reserve, please see the Nov. 12, 2021, episode of Monday Morning Minutes.) Then the podcast hosts dive into the vagaries of oil exportation-importation surrounding the G-7’s adoption of a $60/barrel price cap on Russian oil (28:45), whose potential for effectiveness they regard with a skeptical eye.
After a market review and recap of a relatively light macro news week (Nov. 14-18), hosts Jeffrey Mayberry and Samuel Lau field a listener’s question for The Topic of the Week: What will happen to gas prices when President Joe Biden stops drawing from the Strategic Petroleum Reserve (SPR)* (12:12)? Without making a prediction on prices, Jeff and Sam break down how the SPR functions, discuss the differences between sweet and sour crude and how those two types of oil are refined, the U.S.’ oil refinery infrastructure, and how facilities and production are faring as the country continues what will be a lengthy transition to green energy.
For the week of Nov. 14-18, Jeff and Sam’s coverage includes a down S&P 500 (2:28); an up Bloomberg US Aggregate Bond Index (4:46); and a flat Bitcoin, a possible surprise considering the recent drama in the crypto sector (6:06). On the macro front (7:24), a relatively quiet week included a slight dip in the PPI and strong retail numbers.
Jeff and Sam will be taking off the week of Thanksgiving, which means they will have plenty to recap and discuss when they return to close out November. Happy Thanksgiving and Go USA!
*For more on the operation of the Strategic Petroleum Reserve, check out MMM Episode 41: Broad, Sticky Inflation and the Not-So “Strategic” Petroleum Reserve
DoubleLine Portfolio Manager Jeff Mayberry and Quantitative Analyst Eric Dhall review the Nov. 7-11 week, which saw strong large gains in stocks (2:21) and across all major bond sectors, led by emerging markets debt (4:42). Amid a slight decline in commodities (6:58) and a 21% drop in Bitcoin, gold staged a surprising 5% gain. In the week’s macro news (9:19), the big market movers were headline and core prices for October. Prints in both indexes came in 20 basis points year-over-year below expectations on Thursday, triggering rallies in stocks and bonds. However, Jeff Mayberry cautions (14:35) that it remains to be seen whether October marks the beginning of a disinflationary trend or a mere aberration. He also notes loosening financial conditions on the week, a development that runs contrary to the policy objectives of Federal Reserve tightening.
Looking ahead for the week of Nov. 14-18 (21:42), Messrs. Mayberry and Dhall will be on the lookout for the October producer price index on Tuesday, retail sales on Wednesday, jobless claims on Thursday and the Conference Board US Leading Index on Friday.
After sharing some wise advice on staying warm to keep heating costs down, Monday Morning Minutes host Samuel Lau and guest Eric Dhall, a trader and quantitative analyst on the firm’s Cross Asset team who is subbing for Jeffrey Mayberry, review a mixed market bag and the macro news of Halloween week Oct. 31-Nov. 4. Which all serves as prelude to the Topic of the Week: the FOMC meeting and 75-bp rate hike (11:41). Sam and Eric begin by noting the real-time dynamic of this meeting, in which markets reacted as if they had received a dovish statement from the FOMC, only to run into Chair Jerome H. Powell’s quickly and consistently presented hawkish stance. The markets seemed to turn worse with each minute that passed, notes Sam. It’s the same message, Sam and Eric point out, that Powell has presented for months. Eric turns to “Game of Thrones” to translate Powell’s speech: Winter is coming. Sam and Eric go on to spotlight some of the questions fielded by Powell, whose general response was, price stability and whatever it takes (24:45).
Sam and Eric cover a down week for equities (2:09) and fixed income (3:28) while commodities received a boost from the strong dollar (7:33) and bitcoin was up, breaking 21,000 just before the episode was recorded (8:10). On the macro front (9:49), JOLTS numbers beat expectations, denoting a supply-and demand-imbalance, and ISM Manufacturing marked its 29th straight print in expansionary territory. Looking ahead, it’s a light week (36:28) aside from the much anticipated CPI print on Thursday. This episode was recorded after market close Nov. 4, 2022.
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.
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.
After their survey of the Oct. 10-14 market week (2:13), Jeff Mayberry and Samuel Lau take a deep dive (23:50) into the household inflation expectations component of University of Michigan consumer-sentiment survey. The release of the preliminary October survey on Friday showed a rise in expectations of higher prices, rattling stock and bond markets. The report followed Thursday’s (10:05) Consumer Price Index report that showed a 0.6% month-over-month (MoM) rise in core consumer prices in September vs. expectations of a 0.4% increase, pushing the year-over-year (YoY) rise to 6.6%, its hottest number since August 1982.
Jeff and Sam also take a look inside core CPI, noting that while core goods prices decelerated to 6.6% YoY in September from 7.1% YoY in August, core services prices accelerated to 6.7% YoY from 6.1% YoY. A key culprit behind the higher services inflation was a rise in owners’ equivalent rent (13:53), up 0.75% MoM or 6.7% YoY. In terms of market responses to the week’s inflation news, Jeff and Sam take note of higher yields across the Treasury curve, especially a 19-basis point rise for week in the two-year Treasury yield (3:03) to 4½%, a level last seen in August 2007.
For their topic of the week, Jeff Mayberry and Samuel Lau (20:51) delve into the Job Openings and Labor Turnover Survey (JOLTS), conducted monthly by the U.S. Bureau of Labor Statistics. The hosts kick off their review of the Oct. 3-7 market week with a positive but volatile showing for stocks (3:05), round-tripping yields in the Treasury market (4:46) and a 5% rally in commodities (8:31) led by double-digit gains in the energy complex following OPEC’s decision to cut crude oil production by 2 million barrels a day. Looking at the week’s macro news (11:55), they take note of unanimously hawkish public comments by four different Fed officials, including the once-dovish Neel Kashkari, and Friday’s strong employment reports. The week ahead (32:49) promises a raft of important data points, including the September Producer Price Index on Wednesday Oct. 12, the September Consumer Price Index on Thursday and the University of Michigan 5-to-10-year inflation expectations survey, a reading that is on the radar of Federal Reserve Chair Jerome Powell.
After running down a bloody week to end a bloody month and quarter, and the macro news for the week of Sept. 26-30, Monday Morning Minutes hosts Jeff Mayberry and Samuel Lau field a question from a listener on the impact the shelter cost component has on the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) Price Index (25:58). (For more on how the shelter components work in these inflation indicators, check out MMM episodes 13 and 30*.) As part of their discussion, Jeff and Sam review how the Federal Reserve Bank of Dallas computes shelter cost’s impact on inflation (30:54) as well as how they think shelter cost inflation will influence Fed officials’ messaging (35:30).
Jeff and Sam kick off the episode with a red rundown for the week, month and quarter (1:50), with the pain shared across equities, fixed income (6:34) and commodities (10:24). On the macro front (16:57), they take a look at some durable goods and home prices data before noting the continued strength of the labor market. Jeff and Sam also provide a summation of the week’s messaging from Fed officials: hawk, hawk, hawk (20:31). Next week will be busy with manufacturing, services and labor force numbers (43:19).
After surveying the week’s macro news and carnage in equity, fixed income and commodity markets, host and Portfolio Manager Jeff Mayberry and guest and Quantitative Analyst Eric Dhall unpack (13:48) the market-jarring details of the Federal Reserve’s latest dot plot and Chair Powell’s Sept. 21 news conference. The new dot plot showed a 4.37% median of Fed policymakers’ projections for the federal funds target rate by the end of 2022, a “huge shift” Eric Dhall notes from the 3.4% projection in the previous dot plot that forced repricings across the financial markets.
The podcast episode begins with a review of the Sept. 19-23 of U.S. stocks (1:36), down 4.6% on the S&P 500 with the energy sector worst-off with a loss of 9%. All major sectors of the fixed income markets (3:33) sold off, with the Bloomberg US Aggregate Bond Index down 1.6% and outside the Agg, high yield down 2.8% and emerging markets down 2.7%. Commodities were no place to hide (4:37). The Bloomberg Commodity Index dropped 3.8%, led by the energy complex with West Texas Intermediate crude oil falling 7% to $79.12 per barrel.
Looking ahead to macro news for Sept. 26-30 (25:58), Jeff Mayberry and Eric Dhall are especially on lookout for Friday’s release of the Fed’s preferred inflation indicator: the Personal Consumption Expenditure indicator and its Core PCE component.
DoubleLine’s Sam Lau and Eric Dhall, a trader and quantitative analyst on the firm’s Cross Asset team who is subbing for Jeff Mayberry, wake up to a lot of red in the markets in this episode, recorded before end of trading on Sept. 16, 2022. Investors continued to react to Tuesday’s CPI print, with the S&P 500 tumbling (1:49) and the U.S. Treasury yield curve marking big moves higher, especially on the shorter end of the curve (3:53). The Agg was down almost a point week-to-date (5:32), underscoring that there was nowhere to hide in Fixed Income Land. There was also no love to be found in commodities (6:23) and Bitcoin (7:43). Gold’s low price, its cheapest level in some time, prompts Eric to wonder if goldbugs are being drawn to bonds’ improved yields: “Maybe they’d rather have some coupon in their pocket rather than just the pet rock to look at.”
In terms of Macro, the higher than expected CPI print overshadowed all other data, and Sam and Eric break down some of the concerning numbers, including those for medical care services and shelter (9:27). On the positive side, the labor market remains the U.S. economy’s one bright star (19:31). Next week will bring LEI, and manufacturing and services data, but the FOMC meeting and a possibly hefty rate hike looms large (26:17).
Bringing back their Topic of the Week, Jeff Mayberry and Samuel Lau review a raft of leading and coincident recession indicators (14:49), weighing their historical track records for predictive accuracy and noting what those gauges are saying now. The podcast hosts start with a survey (2:32) of the broad rally in U.S. equities for the week of Sept. 6-9, led by consumer discretionary and materials. Turning to fixed income (5:14), they note higher yields across the U.S. Treasury curve. That move helped push the investment-grade Bloomberg US Aggregate Bond Index to a negative weekly return of 60 basis points (bps) while riskier credits enjoyed positive returns of 2% for high yield corporate bonds, 1¼% for emerging markets debt and 1% for bank loans. The commodity market (7:05) put in a flattish negative 40 bps as measured by the Bloomberg Commodity Index.
In terms of the Sept. 6-9 week’s macro news (9:30), Jeff and Sam find most notable comments by Federal Reserve officials (10:46) before the Sept. 10 start of the blackout on Fedspeak ahead of the Sept. 21 rate-setting meeting of the Federal Open Market Committee. Jeff Mayberry ventures his interpretation of two comments by Fed Vice Chair Lael Brainard: that the Fed will tighten “as much as it takes” to reign in inflation and that gaps between policy actions and economic impacts pose a risk of overtightening. Interpretation: a 75 bp hike in the Federal Funds rate is coming Sept. 21, but perhaps Fed officials are already thinking about moderating hikes further out. The Federal Funds rate futures market, Samuel Lau observes, is pricing that key rate at 4% by the end of 2022.
In a survey of market returns for August, Jeff Mayberry and Samuel Lau (3:25) note a decline of 4% on the S&P 500, with energy up 2.6% and utilities up 50 basis points (bps) to diverge from the negative sectors. The Russell 1000 Value, down 2.98%, outperformed the Russell 1000 Growth, down 4.7%. Turning to the fixed income markets (6:44), they point out that the month’s rise in yields such as 61 bps on the two-year Treasury and 54 bps on the 10-year Treasury understated significant intramonth volatility, especially around Federal Reserve officials’ policy retreat at Jackson Hole, Wyoming. For example, the two-year-to-10-year spread inverted to as much as negative 50 bps before ending Aug. 31 at negative 30 bps.
Commodities managed to eke out a gain of 9 bps in August (10:55) amid the Dollar Index, which tracks the U.S. dollar against other developed market currencies, at its highest levels in over two decades. West Texas Intermediate crude oil front-futures were down 9% for the month. “Given some of the (economic) weakness and central bank tightening financial conditions,” Sam Lau says, “perhaps the commodity market is finally starting to succumb to some of the strength in the dollar.”
After reviewing the JOLTS job openings report, nonfarm payrolls, unemployment and the labor force participation rate (19:20), Jeff Mayberry says, “All eyes are on the CPI number that we get in a couple of weeks, but certainly there’s nothing from the labor force side that would cause the Fed any concern that they shouldn’t raise rates.”
DoubleLine’s Samuel Lau and Jeff Mayberry run down the numbers for the red market week of Aug. 22-26, with stocks in particular falling in the wake of Federal Reserve Chair Jerome H. Powell’s short speech Friday from the Fed’s Jackson Hole symposium (14:40). The S&P 500 Index was down 4% on the week, with most of that decline coming Friday (2:07). Energy was the best performer while tech was the biggest laggard. In fixed income, the two- and 10-year bond yields finished the week higher, and the long bond rallied a bit after the Powell speech. The Bloomberg US Aggregate Bond Index was down 40 basis points on the week with no green to be seen. Commodities delivered a mixed bag (7:07). Bitcoin was down for the week (9:13) to around $20,000, with Sam and Jeff questioning if its historical round-number bias might presage a 50% climb ($30,000) or fall ($10,000).
Over in Macro Land (11:03), data prints included the S&P Global U.S. manufacturing and services PMI numbers at their lowest since 2020, and core PCE has a long way to go before hitting the Fed’s inflation target. The negative second estimate of Q2 GDP number marked improvement but seems unlikely to hit zero or go positive in future updates. Powell’s speech was the macro event of the week (14:33), and Sam and Jeff dig into the details, including how Powell’s pronouncements were consistent with previous statements by other Fed officials but some equity investors reacted as if it were a hawkish surprise.
The Topic of the Week will be returning the first episode after Labor Day, and if you have any suggestions, please send them in via minutes@doubleline.com or @dlineminutes.
Before diving into the market week of Aug. 15-19, DoubleLine’s Samuel Lau and Jeff Mayberry pause in TV Land to bid farewell to “Better Call Saul” and welcome the return of the Targaryens in “House of the Dragon.” Broad indexes were down on the week (2:20), with consumer staples providing some green in the S&P 500 Index, and natural gas (6:49) continuing to bring heat to the Bloomberg Commodity Index despite its historic volatility. Sam and Jeff then discuss whether this week’s performance represents a response to a change to the dovish narrative that initially followed the last FOMC meeting (9:49). Over in Macro Land (10:47), they review retail sales numbers, Fed meeting minutes, jobless numbers and LEI data. Heading into the Fed’s meeting next week in Jackson Hole, Sam and Jeff talk about recent comments from Fed officials on future rate hikes and how statements made by Fed Chair Jerome H. Powell at last year’s meeting panned out (14:20).
Next week will bring PMI numbers, a second quarter GDP update, a PCE print and Chair Powell’s Jackson Hole speech (17:02).
In their review of the Aug. 8-12 market week, Jeff Mayberry and Samuel Lau observe broad rallies across all 11 sectors of the S&P 500 (2:39); most sectors of the fixed income universe (3:56), with the exception of the U.S. Treasury segment of the Bloomberg US Aggregate Bond Index; and most parts of the commodities complex (7:12). Turning to the week’s macro news (9:25), the hosts take note of hawkish Fedspeak by regional Federal Reserve Bank presidents Neel Kashkari (Minneapolis), Mary Daly (San Francisco) and Charles Evans (Chicago). Jeff Mayberry cautions (11:03) Fed watchers not to put too much weight on tamer-than-expected month-to-month changes in the headline and core Consumer Price Index for July. The August CPI, he points out, will come out before the next Federal Open Market Committee meeting (Sept. 20-21).
Looking ahead to the week of Aug. 15 (18:37), Samuel Lau is not expecting much from retail sales, publication of the July 27 FOMC minutes or jobless claims. However, he notes that the Leading Economic Index, which prints Thursday Aug. 18, could decline on a year-over-year basis, which would be “another checked box” for recession watchers.
Jeff Mayberry and Samuel Lau start their review of the Aug. 1-5 week with a positive if slight 40 basis point return for the S&P 500 (2:15), led by tech, up 2%, while energy stocks fell nearly 7%. Turning to fixed income (3:18), surprisingly strong employment readings Friday raised expectations of more tightening by the Federal Reserve. The two-year Treasury yield, which historically has anticipated levels in the Federal Funds rate, was up 34 basis points week-over-week, 18 bps of that coming Friday, to 3.23%. The high-grade bond market as represented by the Bloomberg US Aggregate Bond Index fell 1.1%. With high yield corporate credit returning a positive 20 bps, emerging markets debt 90s bps and bank loans 1.3%, Samuel Lau noted bank loans are “getting pretty close to that zero-to-positive year-to-date number.” The Bloomberg Commodity (7:57) was down 3.2%. Some of the meats and a few of the industrial metals were up on the week. Much of the red ink was in energy, with West Texas Intermediate crude down 10%.
For the week’s macro news, along with strong nonfarm payroll and unemployment reports (12:59), Jeff Mayberry took note of positive and stronger-than-expected ISM reports (10:11) for manufacturing and services in July. As of Friday, Jeff Mayberry noted (17:45), the Fed Funds futures were pricing in 69 bps of a 75 bp hike at the meeting of the Federal Open Market Committee on Sept. 20-21. For the week of Aug. 8-12 (20:05), Jeff and Sam will be looking out for the July CPI report on Wednesday, the July PPI on Thursday and, because Fed Chair Jerome Powell looks at it, the University of Michigan’s preliminary inflation expectations survey on Friday.
After running down healthy market returns and the July 25-29 week’s macro news, DoubleLine’s Sam Lau and Eric Dhall, a trader and quantitative analyst on the firm’s Cross Asset team who is subbing for Jeff Mayberry, review the July Federal Open Market Committee meeting and press conference by Fed Chair Jerome H. Powell (31:29). Sam and Eric break down the economic environment that spurred what Powell called the second of back-to-back “unusually large” 75 basis-point rate hikes, and they also discuss the backdrop that could bring a third such hike in September. Sam and Eric then discuss Powell’s adept Q&A dance performance (36:01). The Fed chair revealed that no more forward guidance would be coming from the agency this year, and Powell did concede he does not think we are in a recession. The market response was mostly positive.
A strong final week, lifted by earnings, boosted the S&P 500 Index on the month (1:53), with consumer discretionary the top performer for the month and communication staples the biggest laggard. In fixed income (5:28), U.S. Treasury yields from the two-year to the 10-year closed the month under 3%. Commodities were up on the month, with natural gas a notable performer (9:26). Over in Macro Land (14:05), GDP data spurred more public debate on recession status.
The week of Aug. 1-5 will be another busy one (41:55), including home price data and possibly market-moving nonfarm payroll numbers.
Along with their review of a positive week July 18-22 for the broad stock (1:21), fixed income (6:43) and commodities indexes (7:50), Jeff Mayberry and Samuel Lau look at a variety of indicators that appear to signal rising odds of a U.S. recession. They note that Treasury yield curve (4:10) has already been inverted at two-year versus 10-year tenors, a gauge favored by market operators. Turning to a spread followed by academics, Sam points out that the 3-month T-bill yield as of Friday was 22 basis points higher on the week, closing in on the yield of the 10-year Treasury note. Jeff thinks “we’ll continue to see the three-month bill continue to climb in terms of rates, and that academic point will be inverted relatively soon.”
In their review of the week’s macro news (10:28), after noting a slight increase in jobless claims, they focus on Thursday’s deteriorating Leading Economic Index, which fell 0.8% versus expectations of a 0.2% decline. With the LEI year-over-year change now at 1.4%, Mayberry notes the index is close to the sub-zero zone that, albeit subject to past false positives, is a recessionary signal (11:19). “If you couple that with the inverted yield curve, it certainly seems like a recession will be forthcoming.” In addition, the preliminary S&P Global Manufacturing PMI came in positive, but S&P Global Services PMI (12:15) came in at 47.0, down from 52.3. Sam Lau will be looking for the next ISM manufacturing and services PMI to see if those series confirm or diverge from the S&P Global Services PMI.
The week of July 25-29 (14:58), the hosts note, will be a busy one with the Federal Open Market Committee meeting, where the FOMC is expected to raise the Federal Funds target rate by 75 basis points, and Jerome Powell’s news conference on Wednesday; the first estimate of second quarter GDP due Thursday; and the Employment Cost Index on Friday.
After reviewing market returns and the July 11-15 week’s macro news, DoubleLine’s Jeffrey Mayberry and Sam Lau field a question on what indicator is the best predictor of commodity prices going forward (21:08). Jeff and Sam start by reviewing the two major commodity indexes, the BCOM and S&P GSCI; their sector weightings; and how momentum is gauged. They then move to a discussion of the outlook for commodities based on longer-term macro factors (26:03), including the futures market, which they cover in-depth in Episode 48. The two note that current commodity performance is just one of the signifiers influencing the talk about recession (34:00). If you are interested in putting together your own indicators, check out Jeff and Sam’s appearance on Channel 11 News for some additional guidance*.
It was an interesting market week (1:49) full of market-moving macro data. It was a mixed bag for fixed income (3:05), and the struggle in commodities continued (8:05). Currency conversions on the week got a little easier as the euro broke parity, basically achieving a 1-1 exchange with the U.S. dollar (9:35). On the macro front (11:55), the main news was the higher than expected CPI print for June, which broke into the 9 handle. Meanwhile, June retail sales numbers were actually pretty strong (16:30).
*MMM Episode 48: 7% CPI, Pricing in 4 Rate Hikes and a Primer on Commodities Futures
** Channel 11 News S3 E4: Do Commodities Have Room to Run?
DoubleLine’s Jeffrey Mayberry and Samuel Lau shut the door on a rough first half to the year and begin the second half with coverage of the short, pretty crazy week of July 5-8. Following last week’s signals pointing toward recession, this week included a strong run by the S&P 500 and offered data that could be pointing to at least a little growth (1:59). In fixed income (3:03), the U.S. Treasury yield curve closed the week above the 3 handle across the board, but the 2s10s (two-year/10-year) inversion clocked in across all four days. Jeff and Sam wonder if Monday will bring the fifth consecutive day, a traditional barometer pointing toward recession, and if any analysts will change their tune on how long the inversion must last. Sam also says to be on the lookout for an inversion of the 3s10s (three-month/10-year), a very reliable herald of recession. Commodities’ big positive print on the year continued to fade (7:01).
Jeff and Sam note the stock market doesn’t seem to be following a recessionary narrative before moving into Macro Land (9:15), which delivered services PMI and labor data that could be read as bolstering or questioning a recession story. Next week brings the June CPI and an answer to whether peak inflation was hit in May. This episode was recorded after market close July 8, 2022.
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.
DoubleLine’s Jeffrey Mayberry and Samuel Lau run down the reversals during the short market week of June 21-24. Jeff and Sam note the seasonal effect of summer doldrums across the week in which the bulk of market activity occurs right after opening and is then followed by mostly flat lines the rest of the day. In a thematic reversal (1:59), the S&P 500 and Agg were up for the week – as was Bitcoin – while commodities were down, a sector that could have its first negative month since November 2021. It was a relatively sparse week for Macro Land data, with PMI manufacturing and services numbers missing estimates but still in expansionary territory (10:28). While Jeff and Sam are not big on surveys they do take a look at the new University of Michigan Consumer Sentiment Survey, as Fed Chair Jerome H. Powell mentioned the metric at last week’s FOMC press conference (12:11). Next week will bring in some lagging measures (16:10), including durable goods in May and April home prices, as well as Jeff and Sam’s review of the first half of the year. This episode was recorded after market close June 24, 2022.
After a recount of the rough, red run for the market week of June 13-17, DoubleLine’s Jeff Mayberry and Samuel Lau review the June meeting of the Federal Open Market Committee (FOMC) and Fed Chair Jerome H. Powell’s subsequent press conference (19:37). The FOMC approved an increase of 75 basis points for the federal funds rate, a move somewhat cushioned by the leaking of the decision to a Wall Street Journal reporter earlier in the week (15:00). Topics covered include why the Fed doesn’t raise the rate in one large move instead of incremental hikes (21:41), dot-plot projections pointing to a deteriorating economic outlook (24:54), and Powell’s press conference performance and mention of “eye-catching” data (29:38).
A red wave washed over the market in the week of June 13-17, leaving investors with nowhere to hide (2:06) as even commodities shared in the pain (9:55) while Bitcoin took a bruising (14:20). On the macro front, the PPI data suggests that inflation may be moderating (17:15) and the LEI number fell as expected (18:58). This episode was recorded before market close June 17, 2022.
In their review (1:49) of the carnage in the equity and bond markets June 6-10, Jeff Mayberry and Samuel Lau zero in (3:50) on “a big compression of the differential” between the yields of the two- and 10-year Treasury notes. As of Friday’s close, the 10-year yielded only 9 basis points more than the two-year. Not yet an inversion, so not enough to put Jeff and Sam on recession watch, but thin enough to put them on “the pre-watch to the watch.” In their discussion of the week’s macro news (11:32), the showstopper of course was the CPI and Core CPI reports for May (12:42), both showing accelerating inflation. While one economist suggested the negative news was tempered by the fact that inflation was limited to energy and energy-linked inputs (14:18), Samuel Lau pointed out that the rising cost of shelter is “already a big contributor to that Core CPI print” and “is picking up speed.”
For their Topic of the Week (20:12), the podcast cohosts discussed the phenomenon of stagflation, which is the prevalence of high inflation amid a sluggish economy. They found similarities between the present environment and the economic context of the 1970s-early 80s when the U.S. last experienced stagflation. Turning to the economic calendar (23:38) for the week of June 13, the cohosts concentrated on the Federal Open Market Committee meeting, scheduled for Wednesday June 15. Jeff Mayberry noted the federal funds futures market on Friday June 10 increased the probability of a 75-basis point hike in the fed funds to 27%, up from 9% as of the previous day’s close. He doubts, however, that Friday’s inflation report will be enough to “spook the Fed” into a 75-basis point hike and still expects a 50-basis point move by the FOMC.
DoubleLine’s Jeff Mayberry is once again joined by Eric Dhall, a trader and quantitative analyst on the firm’s Cross Asset team who is subbing for Samuel Lau at the end of the holiday-shortened market week of May 31-June 3. Jeff kicks off the review of a relatively quiet week with a look at equities, which are operating under a conflicted dynamic where strong performance draws a Fed reaction. This is a reversal from the Fed’s long run of moving to boost the market. Bank loans were a standout on the fixed income side, where Eric notes that bonds do look attractive at these levels. (5:31) Commodities remained strong year-to-date*; Bitcoin remained the year’s worst performer. (8:46) Over in Macro Land, housing prices were up 21% in March, putting further pressure on consumers. (11:32) After running through a mixed bag of macro metrics and discussing Fed rate hike expectations, Jeff and Eric look to next week (22:00), which will bring data on consumer credit as well as a new CPI reading.
*For a deeper look at commodities, check out Jeff and Sam’s DoubleLine Strategic Commodity Webcast: Driving Season (recorded May 24, 2022).
Surveying the week of May 23-27, Jeff Mayberry and Samuel Lau (2:01) take note of improved investor sentiment in the form of a rally in stocks, allowing the S&P 500 to skirt the -20.00% definition of a bear market. The improvement in stocks was accompanied by lower bond yields. While bitcoin has typically behaved as a risk asset, the cryptocurrency was down about 1% on the week as of mid-Friday May 27 (8:38). Jeff Mayberry asks whether that move in bitcoin is contradicting the more optimistic message of the week’s rally in stocks, or whether bitcoin’s decline, muted compared to larger losses for other cryptocurrencies, suggests technical selling pressures are abating for the marquee cryptocurrency.
Turning to the week’s macro news, the cohosts zero in on the release of minutes of May 4 meeting the Federal Open Market Committee (FOMC) (10:34). The minutes took note of tightening financial conditions, Fed expectations of a rebound in GDP in the second quarter of the year and PCE price inflation on a path to near the Fed’s 2% inflation target in 2024. “They are being a little optimistic,” Samuel Lau says, “relative to what the market’s thinking in terms of the progression of PCE price inflation.” While the minutes couched the statement in what Jeff Mayberry describes as a “squishy” turn of rhetoric, the FOMC for the first time raised the possibility of the Fed’s selling Agency mortgage-backed securities.
For the week of May 30-June 3 (25:28), the hosts point to the March reading of S&P CoreLogic Case-Shiller 20-City Composite City Home Price Index on Monday; the beginning of quantitative tightening, the ISM manufacturing survey for May and JOLTS job opens report on Wednesday; and the ISM services and May labor market reports on Friday.
With Samuel Lau on the road, DoubleLine’s Jeff Mayberry is joined on the latest episode of Monday Morning Minutes by Eric Dhall, a trader and quantitative analyst on the firm’s Cross Asset team, to break down a volatile May 16-20 week in the markets. Jeff and Eric begin with a look at the S&P 500, which narrowly averted a bear market Friday and was down 3% on the week. Energy, healthcare and utilities were the week’s only positive performers. Consumer discretionary was the big loser, down almost 8% on the week and 31% on the year. Bonds actually helped this week for those with a diversified portfolio, with Eric pointing out the value of diversification amid a bear scenario. (3:35) Over in Macro Land, Eric digs into a retail sales report that generated positive headlines but could be heralding price hikes at some big retail chains. (7:29) The labor market remained strong, posing a challenge to inflation-fighting efforts by the Fed, whose messaging is saluted by Jeff and Eric for being consistent. (10:28) The Topic of the Week will return next week, when Sam rejoins Jeff to take a look at the FOMC’s May meeting minutes.
After reviewing another wild market week for May 9-13 (2:05) and the April consumer and producer price indexes (8:49), Jeff Mayberry and Samuel Lau examine the bloodbath in the algorithmic stablecoin pair TerraUSD-LUNA (14:15), then ponder the unknowns of other stablecoins, including Tether and USD Coin, (16:30) and the risks to the broader financial system (26:43). Among other issues, they note that while Tether and USD Coin claim to be backed by cash reserves and cash equivalent to ensure their parity to the U.S. dollar, those assets are opaque to investors. For the week of May 16-20, (33:10) Jeff and Sam will be on watch Tuesday for retail sales and Thursday for the monthly release of the Leading Economic Indicators.
After reviewing Willy Whipsaw’s deviltry in the markets of May 2-6 (1:34) and the week’s macro news (10:16), Jeff Mayberry and Samuel Lau dive (14:03) into the May 4 meeting of the Federal Open Market Committee, which raised the range of Federal Funds rate by 50 basis points, and Federal Reserve Chairman Jerome Powell’s news conference. While the risk markets rallied that Wednesday on Powell’s ruling out for the time being 75 bps move hikes, Jeff and Sam in particular focus on the Fed’s guidance on the pace and timing quantitative tightening. QT is scheduled to start June 1 with potential reductions of $30 billion in Treasuries and $17½ billion in Agency MBS, shedding those assets at a pace of up to $60 billion and $35 billion, respectively, in subsequent months.
Looking ahead the week of May 9-13 (31:40), Jeff and Sam will be watching Wednesday for the Consumer Price Index for April, and Thursday for the Producer Price Index.
After reviewing month and year-to-date market returns (1:58) and the April 25-29 week’s macro news (10:25), Jeff Mayberry and Samuel Lau turn to the broad topic of commodities (15:06), including asset class’s diversification benefits relative to stocks and bonds, the cyclical factors that have supported surging prices and the structural supply and demand factors that could support commodity prices over the longer term, particularly signatories of the Paris Agreement to convert to green energy sources. “When we talk about renewable energy, you have things like solar, wind and electric vehicles, all of which are commodity intensive,” especially in terms of industrial metals, notes Sam Lau.
The big macroeconomic news of the week was the 1.4% month-over-month decline in U.S. gross domestic product versus the consensus expectation of a 1.0% increase. “The market didn’t seem to move much on that number even though it was a big disappointment,” Jeff Mayberry observes. The week of May 2-6 (35:14) could be a volatile one, he notes, given a heavy news schedule with, among other items, the ISM manufacturing number for April due Monday, JOLTS job openings on Tuesday and most importantly the meeting of the Federal Open Market Committee.
After covering the week of April 18-22 for U.S equities, fixed income and commodities (2:06), hosts Jeff Mayberry and Samuel Lau put the 9.4% year-to-date negative return of the Bloomberg US Aggregate Bond Index into historical context (6:41). So far, the ongoing drawdown that began August 2020 is the second-worst peak-to-trough decline in the history of the Agg. The worst, recorded back when the then-Lehman Brothers US Aggregate Bond Index was calculated monthly, was a decline of 12.7% from a peak at the end of July 1979 to a trough at the end of February 1980. After that perspective from the rear-view mirror as well as a review of the week’s macro news (11:08), Jeff and Sam put on their forward-looking glasses for insight into future movements and levels of the Federal Funds rate (17:08). Among their recommendations, they agree with Federal Reserve Chairman Jerome Powell that the monthly dot plot, which depicts simple polling of Federal Open Market Committee (FOMC) members on the future level of the Federal Funds rate, provides little useful information. For better guidance, Jeff and Sam rely on the formal statements of the FOMC itself, the Fed chairman’s news conferences and inter-meeting statements by Fed officials. For market indicators of expected rate moves at future FOMC meetings, they rely on the Bloomberg WIRP function and the Chicago Mercantile Exchange’s Fed Watch page. Both these tools distill rate level probabilities from pricing in the Fed Funds futures market. For an idea of where the Fed Funds rate will ultimately end up, they, like DoubleLine CEO Jeffrey Gundlach, use the yield on the two-year Treasury note.
After covering the market action and macro news for the abbreviated week of April 11-14, host Samuel Lau and guest host Eric Dhall, a trader and quantitative analyst on DoubleLine Capital’s Cross Asset team, survey (20:08) the hottest rise in consumer and producer prices since the early 1980s. While wishing Federal Reserve Chairman Jerome Powell success in achieving a “soft landing” that tames inflation while avoiding recession, they criticize (29:52) as hubris claims by Fed officials that they will succeed in achieving “neutral rates” through a rapid series of hikes of the Federal Funds rate. In passing, Eric takes note (25:54) statements by Taiwan Semiconductor that it expects manufacturers to try to build up stockpiles of computer chips to hedge against higher chip prices in the future. This is an example, he says, of how deeply inflation concerns have infiltrated the thinking of business management.
Given the sustained surge in commodity prices, Monday Morning Minutes listeners who want further background on commodity futures can check out Monday Morning Minutes episode 48, recorded Jan. 14, 2022. That backgrounder starts 15 minutes 46 seconds into the episode.
Among items to look out for the week of April 18 (34:18), Sam and Eric point to the releases of the Fed’s Beige book on Wednesday and latest print of the Leading Economic Indicators on Thursday. In addition, Powell and Christine Lagarde, president of the European Central Bank, Thursday will speak on a panel on the global economy. This episode of Monday Morning Minutes was recorded April 14, 2022.
After market and macro news for the week of April 4-8 (3:21), Jeff Mayberry and Samuel Lau for their Topic of the Week compare the relative performance of active asset managers in U.S. stock and bond markets (20:01). This discussion starts with the S&P Indices vs. Active report (SPIVA), which compares the performance of active managers to indices such as the S&P 500 in the case of large-cap equity managers and the Bloomberg Global Bond Aggregate for fixed income managers. SPIVA consistently shows that only a small percentage of large-cap equity managers manage to beat the S&P 500 whereas half or more of active fixed income managers, depending on the timeframes measured, succeed in outperforming the Global Agg. However, that’s not the whole story. Jeff Mayberry explains (28:19) bond managers have much more opportunity to select whole bond sectors outside the Global Agg to improve performance, an option closed open to managers who wish or must stay within the large-cap category.
During the podcast hosts’ review of the market week, Samuel notes (5:33) “pronounced moves” at the longer end of the U.S. Treasury curve restored it to a normal upward slope (longer tenors yielding more than shorter tenors), cutting the yield inversion to three consecutive days. As a recession alert, historically inversions have persisted at least five consecutive days. So perhaps, Sam says, the economy is in “a crisis-averted situation.” Turning to the Federal Reserve (12:12), Jeff expressed surprise that Fed officials want to ramp up to the maximum monthly rate of balance sheet reduction – $35 billion for Agency mortgage-backed securities, $60 billion for Treasuries – in just three months. He suggests the markets might not be able to stomach a sustained balance-sheet normalization at such an aggressive pace.
After reviewing market and macro news for the week of March 28-April 1, DoubleLine’s Jeff Mayberry and Samuel Lau – in the international spirit of the just-unveiled men’s World Cup draw – field a question from Charles, a listener in France, on whether we should be paying attention to the real U.S. Treasury yield curve over the nominal yield curve in the wake of the Federal Reserve’s balance-sheet expansion since the Global Financial Crisis and in the COVID-19 era (20:04)*. Charles also asks if the increased steepening of the real yield curve this year should spur the Fed to be more aggressive in hiking the target federal funds rate. Basically, Jeff and Sam seek to answer: Are things different this time? They say no. With help from the DoubleLine team, they discuss the Fed’s lack of control over the real yield curve, which is mainly shaped by the market (22:12), and the real yield curve’s use as an economic indicator (27:49).
Jeff and Sam review a mixed March 28-April 1 market week as well as a rough first quarter, including the Agg’s worst quarter since 1980 (2:42). Their rundown of Macro Land includes some surprises, including home prices to the up side and personal spending to the down side, and more signs of a strong labor market (13:55). Next week will bring a chance to dig in to the minutes from the Federal Open Market Committee’s March meeting. This episode was recorded April 1, 2022.
*For more information on the U.S. Treasury yield curve, check out:
MMM Episode 52: Yield Curve Flattening as an Economic Indicator
After reviewing market and macro news for the week of March 21-25, DoubleLine’s Jeff Mayberry and Samuel Lau answer a listener’s question on how quantitative tightening (QT) could impact the 10-year U.S. Treasury yield (19:41) as well as the TIPS market, in which the Federal Reserve has a large footprint. Jeff and Sam look back at previous QT periods and note the accelerated pace of plans for interest rate hikes and balance sheet reduction in 2022. After discussing a pair of alliterative QT events, the Taper Tantrum and Powell Pivot (24:18), the duo reviews hiking cycles in 1984 and 1994 that Fed Chair Jerome H. Powell says resulted in economic soft landings (29:21), with the lack of inflation a key factor both times. Jeff and Sam conclude the segment with a breakdown of QT’s possible impact on the TIPS market and breakevens (33:29).*
The week of March 21-25 delivered a lot of action in U.S. soccer as well as a risk-on sentiment in the markets (2:05). The S&P 500 had a strong week, Fixed Income Land observed some curve flattening (3:18), and while commodities stayed strong (6:22), the nickel market remained reined in (7:42). The past week was relatively light on macro news (9:42); next week’s macro numbers will include home prices, JOLTS data and nonfarm payrolls (40:14).
*The following previous episodes contain more information on this week’s topic:
Real and Nominal Yield Curves What Is a Bear Flattener? FOMC Guidance on Tapering
After reviewing market and macro news for the week of March 14-18, DoubleLine’s Jeff Mayberry and Samuel Lau cover the March Federal Open Market Committee Meeting (FOMC), which brought a summary of economic projections and expected hike of 25 basis points (14:07). Topics discussed include updated projections, Fed Chair Jerome H. Powell’s prepared remarks and plans for reducing the balance sheet (21:59) and Powell’s performance in the Q&A segment and his perfect answer of “none whatsoever” to one reporter (23:18).
The week of March 14-18 delivered St. Patrick’s Day, March Madness and a strong performance for U.S. equities pretty much across the board (1:59). On the fixed income side, there was some yield curve flattening, with the spread between the two- and 10-year yields narrowing (4:10). Commodities were down for the week but still the best-performing asset class on the year (7:58), and Jeff and Sam check in on the LME market for nickel covered in last week’s episode*: It’s still dysfunctional. Looking ahead to next week, PMI numbers get a new moniker, and cooling is expected for home sales and durable goods (37:10).
*MMM Episode 56: A Wild Week for Nickel and a Bailout for Big Shot
After reviewing macro news and markets for the week of March 7-11, Jeff Mayberry and Samuel Lau turn to the price explosion in nickel on the London Metal Exchange for their topic of the week (13:31). They analyze the short squeeze that produced two back-to-back days of 60% price gains in the industrial metal before the LME halted trading. They also criticize the LME’s controversial decision break at least $4 billion in trades to the benefit of Xiang Guangda, the short-selling, short-squeezed Chinese nickel-and-steel tycoon who styles himself “Big Shot.”
Stocks (2:16) fell broadly for the week ended March 11. The S&P 500 declined 2.9%, led by a nearly 6% decline in consumer staples as companies in that sector announced suspensions or cessations of business in Russia. Energy, the lone positive sector, gained more than 2%. Fixed income markets (4:03) were weak as well, including across the U.S. Treasury curve. Even commodities as tracked by the Bloomberg Commodity Index gave up half a point (6:59). “The underpinnings (for commodities) are still quite strong on the fundamentals,” Sam Lau says, but “there’s going to a lot of chop given the potential disruptions around the war” in Ukraine. Some of biggest losers were wheat, down 19%; gasoil down almost 15%; and aluminum down 10%. These moves, however, are dwarfed by commodities gains in prior weeks, a fact, Jeff Mayberry warns, that promises higher levels of inflation (11:16). The Consumer Price Index came in at 7.9% YoY for February, but he notes that doesn’t include the “commodity rocket ship that we’ve experienced over the past couple of weeks.”
After reviewing macro news and markets for the week ended March 4, Jeff Mayberry and Samuel Lau try to bring some clarity to the chaos reigning over ETFs, indexes and other instruments with direct exposure to Russia (15:14). The war in Ukraine and dueling sanctions from Russia and the West have resulted in trading halts for specific securities by the New York Stock Exchange/Arca and by the Chicago Board Options Exchange, ETF liquidations and removal of Russian stocks from some of the diversified indexes that had included them. Surveying the week in markets (2:12), the cohosts note the S&P 500 declined 1.27% for the week, led lower by financials, which lost nearly 5%. Energy stocks rose 9% on fears of Russian supply disruptions. A flight to safety in Treasuries brought the 2- to 10-year yield spread closer to inversion with only 10s yielding only 25 bps more than 2s. That Russian supply shock story was in stark evidence in the commodities markets (6:50). The Bloomberg Commodity Index surged 13%, with the greatest strength in commodities dependent on Russian producers, including wheat, up 60% for the week. Looking ahead to the market week ending March 11 (29:03), Jeff and Sam note the consensus expectation of an 80 basis point month-over-month increase in the February Consumer Price Index, due Thursday March 10. That would mean a 7.9% year-over-year increase in the CPI. Barring an unforeseen inflationary shock, such as a hotter-than-expected CPI, Jeff Mayberry expects a 25-bp hike in the Federal Funds target rate when the Federal Open Market Committee convenes March 16.
After running down market and macro news in the face of threatening moves by Russia toward Ukraine, Jeff Mayberry and Samuel Lau look at the sanction responses by the West after Russia’s invasion as their Topic of the Week (17:55). This episode was recorded Feb. 25, 2022. They cover the initial sanctions by various countries and the EU, including restrictions on banking and limiting access to key technology; which parties are already calling for ratcheting up those sanctions or employing additional measures, and what form those moves might take; Russia’s ability to handle current and future sanctions; and the current hesitation to cut off Russia from the SWIFT banking system, which Jeff and Sam see as the worst-case scenario (24:14).
Despite the looming invasion threat, Jeff and Sam note that the flight to quality that might have been expected never materialized in the market week of Feb. 21-25, possibly because markets had already priced in an invasion and the sanctions response was milder than some had anticipated. Equities (2:17), fixed income (3:54) and commodities (6:04) marked a positive week. Next week will deliver manufacturing, ADP and employment data, and an appearance by Fed Chair Jerome H. Powell before the House (31:40).
After reviewing the week in markets and macro news, Jeff Mayberry and Samuel Lau take up the market-moving capacity of geopolitical events for their Topic of the Week (16:14). For part of their research, they reference a Deutsche Bank report that analyzed selloffs of the S&P 500 in response to 25 geopolitical events post-World War II. Sam also looks at the behavior of fixed income, oil and gold during these stock selloffs. Interestingly, he notes, the stock-market selloffs were less severe in most cases than some might have expected and tended to be short-lived. The median selloff was a loss of 6%. Only four of the 25 geopolitical events resulted in drawdowns of greater than 10%. The worst event was the Middle East oil embargo of October 1973, which led to a 17% decline in a month’s time. The worst selloffs occurred in the context of already weak economic conditions and/or market trends. This episode of Monday Morning Minutes was recorded Feb. 18, 2022.
The inspiration for the hosts’ choice of topic was the market volatility in recent weeks around changing assessments of the likelihood of a Russian invasion of the Ukraine. The S&P 500 lost 1.6% for the week of Feb. 14-18 (2:08). In fixed income, Jeff and Sam take note of the steepening of Treasury curve (3:27) and spread widening in investment-grade corporates. Commodities (5:14) were up 1.6% with natural gas up more than 12%, perhaps in sympathy with the Russia-Ukraine-roiled nat gas market in Europe. The release of the dovish minutes of the Federal Open Market Committee (9:11) and remarks from Cleveland Fed President Loretta Mester and New York Fed President John Williams, Jeff and Sam say, contributed to markets dialing down the probability of a 50 bp rate hike at the FOMC’s March meeting.
After their market and macro reviews for the Feb. 7-11 week, Jeff Mayberry and Samuel Lau for their Topic of the Week (17:30) take a look at flattening of the U.S. Treasury yield curve as a recessionary and economic indicator. (Jeff and Sam talk about the yield curve in prior Topics of the Week in episodes 11 (nominal and real yield curves) and 24* (bear and bull flattener and steepeners).) In their deep dive, they talk about inversions, when yields of shorter parts of the curve rise higher than yields of longer parts of the curve, resulting in negative spreads. They review the three commonly tracked yield spreads and how accurately inversion of those spreads heralded the six recessions dating back to the mid-1970s (21:20). Jeff and Sam stress that they do not currently see recessionary signals in the yield curve.
Their review of the week ended Feb. 11 was shaken up Friday by rising tension between Russia and Ukraine leading to some end-of-week market shifts (1:26). Macro coverage includes discussion of sticky inflation and how expectations grow for interest rate and QT moves by the Fed (9:19). Jeff and Sam preview a pretty busy week, including PPI and retail sales numbers, and Fed meeting minutes while hoping for a peaceful and safe Super Bowl weekend (32:00).
*MMM: Recap of the April 12-16 Market Week
**MMM Episode 24: July 12-16 Recap, Question of the Week and Outlook
After their market and macro reviews for the Jan. 31-Feb. 4 week, Jeff Mayberry and Samuel Lau for their Topic of the Week (20:48) delve into the surprisingly wide divergence between the January jobs reports by the payroll processing giant ADP and the U.S. Bureau of Labor Statistics. On Friday, the BLS reported the U.S. added 467,000 jobs in January (including 444,000 in the private sector), a surprising departure from the 301,000 loss indicated on Wednesday by the ADP survey. Over the long term, the ADP report, which front runs the BLS report two days in advance, has closely correlated to the government report. As a result, the ADP numbers caused some analysts to revise slightly lower their expectations of the BLS number. However, Mr. Lau notes (34:00), “it seems like for the most part, the financial markets do shrug off the ADP numbers and wait that two days and show that patience to get the BLS report.”
In their recap of the market week ended Feb. 4, which saw a rise of 1.55% of the S&P 500 and a 2.27% gain by the Bloomberg Commodity Index, the podcast hosts (5:19) zeroed in on the ongoing losses in investment-grade corporate bonds. That sector of the fixed income universe posted a return of -1½% for the week, bringing its year-to-date return to -5%. Looking ahead to macro news for the following week (41:19), they have their radar fixed on the January Consumer Price Index report due Thursday and the Atlanta Fed’s wage growth tracker on Friday. The headline CPI, according to the consensus estimate, is expected to print 7.3% year-over-year versus 7.0% the previous month. Mr. Mayberry says the January or February CPI “is likely to be the peak of the cycle”; he’ll be watching the Atlanta Fed wage growth tracker to see “if we’re getting into a wage-price spiral.”
After reviewing a week that started scary for stocks (3:16) to finish up 80 basis points on the S&P 500 with a strong finish Friday and unpacking the heavy macro calendar for Jan. 24-28, Jeff Mayberry and Samuel Lau delve (16:58) into the prepared guidance released by the Federal Open Market Committee and Federal Reserve Chair Jerome Powell’s news conference. The co-hosts of Monday Morning Minutes note Powell made it clear the Fed’s mind is on keeping the lid on inflation, not on growth or the supposedly strong labor market. However, while striking a somewhat more aggressive tone than in the recent past, nonetheless did his share of “tap dancing.” He notably pivoted between repeated promises of a “predictable” policy trajectory and hedging with a call for the Fed to remain “nimble” in the event of unforeseen developments in the economy. For now, Jeff notes, the markets seem to have given the Fed “the green light” (34:18) for at least four rate hikes this year with balance sheet reduction to begin in the summer.
Among other items for the market week, within fixed income, Jeff and Sam took note of a flattening Treasury curve (6:15), driven by rising yields on the front end. Within the investment grade bond universe benchmarked by the Bloomberg US Bond Aggregate, which lost 37 bps on the week, the underperforming sector was investment grade corporate, down more than 90 bps. IG corporates are down 3.6% year-to-date, the worst performance of the fixed income sectors so far in 2022.
After a review of the Jan. 18-21 market activity and macro news, DoubleLine’s Samuel Lau and Jeff Mayberry explain and explore how to trade volatility, particularly in light of their discussion in the last episode on the futures curve*, which is one way to trade the Volatility Index (VIX) (16:08). In their deep dive, they take a look at the history and methodology of the VIX (commonly referred to as the Fear Gauge) and how the index correlates to performance of S&P 500 Index options, what it means to short or go long volatility, ways to gain exposure to the VIX and how a sudden spike in volatility led to February 2018’s Volmageddon.
In their recap of markets for Jan. 18-21 (2:07), no sector was spared from a sea of red. The U.S. Treasury yield curve flattened (4:21), with the 10-year down and the shorter end of the curve up. Commodities enjoyed a strong week (8:56), including gold. Bitcoin was down. After a fraught weekend of NFL playoffs and food-based headwear, next week’s events (34:57) will include housing price and PCE numbers, an advanced estimate of fourth quarter GDP and a much anticipated Federal Open Market Committee meeting.
*MMM Episode 48: 7% CPI, Pricing in 4 Rate Hikes and a Primer on Commodities Futures
https://doubleline.com/podcast/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.
After analyzing a “crazy week” Jan. 3-7 in the markets and covering the latest batch of macro readings, Jeff Mayberry and Samuel Lau dig into two indicators to gauge the future direction of the cost of labor and ultimately that of inflation: the Atlanta Fed Wage Growth Tracker and the Employment Cost Index (23:23). Both these indicators run on data gathered by the Bureau of Labor Statistics. A key advantage of the Atlanta Fed measure is that it relies on a stable sample set of surveyed workers. Thus, it does not suffer from the statistical noise created by changing sample sets that afflicts Average Hourly Earnings data. In their summary of the market week (1:24), Jeff and Sam survey negative returns across a broad swath of markets, including stocks, high yield bonds, investment grade bonds and Bitcoin. Two bright spots: bank loans, which are floating rate, and the commodities complex, led by energy.
Topping the week’s macro news events was the release of the minutes of the Dec. 15 meeting of the Federal Open Market Committee (14:27). While Jeff and Sam found no surprises in the minutes, the market sold off on the news of a Fed apparently turning more hawkish with respect to the pace of ending asset purchases (quantitative tightening) and timing of initial hikes of the official short-term rates in 2022, which could begin as early as March. Looking ahead to the week of Jan. 10 (34:01), Sam and Jeff will be on the lookout for the Consumer Price Index for December, which comes out on Wednesday Jan. 12; the Producer Price Index, Thursday; and retail sales, Friday.
DoubleLine’s Jeff Mayberry and Sam Lau wrap up 2021 with a breakdown of the Dec. 17-31 market week and performance summation for the year, a great period to own risk assets, buoyed by fiscal stimulus checks and the Fed’s accommodative policy. The S&P 500 Index finished the year up almost 29%, posting 70 record highs across 2021 and leaving little opportunity to buy the dip (3:54). On a sector basis, energy was the year’s best performer, up 53%, and the worst performer on a relative basis was communication services, up 16% (5:42). Large caps beat small caps (7:50), and growth stocks beat value stocks (9:26). Jeff and Sam review the performance of fixed income assets, noting that despite the Bloomberg US Aggregate Bond Index marking only its fourth negative annual return since 1976, there were strong returns to be found in nontraditional sectors (10:23). A look at commodities, where coffee was the big winner, and bitcoin rounds out the rundown on risk assets (14:44). A review of macro factors (20:08) leads to a look at 2022, with inflation and the labor market expected to be among the major issues next year (29:29). Happy New Year! This episode was recorded Dec. 31, 2021.
DoubleLine’s Jeff Mayberry and Sam Lau break down the markets going into the holiday break – no Monday Morning Minutes next week – with a weak run for risk assets for the week of Dec. 13-17. Jeff and Sam take a look at markets, noting that bitcoin served as a good risk barometer for the stock market as they were both down for the week. An unexpectedly accelerated Producer Price Index and weaker than expected retail sales were among the news from Macro Land (6:30). The duo dives into the Federal Open Market Committee meeting and Fed Chair Jerome H. Powell’s press conference, doling out high praise for Powell’s masterful performance and handling of some not-so-penetrating press questions (10:05). Jeff and Sam break down the market’s reaction to an accelerated taper pace (13:04), what a March 2022 conclusion to the taper might mean for the timeline of interest rate hikes (15:08) and if Fed officials are already floating a schedule for reducing the balance sheet (32:50), among other topics. Jeff and Sam will be back on New Year’s Eve to cover the final two weeks of the year and the other 50 with a 2021 Year in Review. Happy Holidays! This episode was recorded Dec. 17, 2021.
After their review of stocks, bonds, bitcoin and commodities for the week of Dec. 6-10, 2021, cohosts Jeffrey Mayberry and Samuel Lau peruse the latest readings of jobless claims and the Consumer Price Index (7:31). Taking note of the rise in stocks Friday on the heels of the CPI’s 6.8% year-over-year increase in November, Jeff notes “maybe the market was expecting a higher print,” adding that a minimal month-to-month rise would push the CPI to a 7.0% gain or higher for December. For their Question of the Week, Jeff and Sam explain the use of federal funds futures pricing in deciphering market expectations for the direction and level of that official short-term interest rate (12:06). They also delve into tools based on fed funds futures pricing to handicap changes in that interest rate, including the Chicago Mercantile Exchange’s CME Fed Watch Tool and Bloomberg Financial’s World Interest Rate Probability (WIRP) function (17:13). Looking ahead to the week of Dec. 13, Jeff and Sam discuss the “big meeting” of the Federal Open Market Committee on Wednesday (28:05) with its prospects of embarking on aggressive tapering to quantitative easing in an effort to reach an end to the Federal Reserve’s bond buying in March 2022.
DoubleLine’s Jeff Mayberry and Sam Lau record a more markets-oriented podcast covering the week of Nov. 29-Dec. 2 in front of a live sales team audience at DoubleLine’s L.A. office during the second day of the firm’s Winter Sales Retreat. The S&P 500 Index was down 2% on the week, with utilities the lone positive sector, while the 10-year U.S. Treasury yield was down 10 basis points (bps). The Bloomberg US Aggregate Bond Index was up about 70 bps with every component in the green. Among commodities, WTI crude dropped to $66, well below the $70 handle, and natural gas tumbled 25%, cutting its year-to-date (YTD) return to 60%, possibly leaving coffee and Bitcoin to battle it out to be the year’s best performer. In Macro Land, coverage includes Jeff and Sam’s look at the move by President Joe Biden to tap the Strategic Petroleum Reserve, discussed in detail in Episode 41* (7:56).
For the Question of the Week, at the request of the DoubleLine sales team, Jeff and Sam share a list of inflation indicators that fall outside traditionally followed prints such as the Consumer Price Index (CPI) (18:53). Indicators discussed include a range of metrics published by Federal Reserve banks as well as indicators covered in past Questions of the Week**.
Looking ahead, Jeff and Sam preview the new CPI number (28:17). This episode was recorded Dec. 3, 2021, before market closing.
*Episode 41 Strategic Petroleum Reserve https://doubleline.com/podcast/mmm-episode-41-broad-sticky-inflation-and-the-not-so-strategic-petroleum-reserve/
**Previous Questions of the Week:
Episode 30 Paper on Surging Housing Prices https://doubleline.com/podcast/mmm-episode-30-aug-23-27-recap-question-of-the-week-and-outlook/
Week of June 7-11, Sticky, Flexible Inflation https://doubleline.com/podcast/monday-morning-minutes-recap-of-the-june-7-11-market-week/
Week of April 26-30 Owners’ Equivalent Rent https://doubleline.com/podcast/monday-morning-minutes-recap-of-the-april-26-30-market-week/
Jeff Mayberry and Sam Lau spend the Friday before Thanksgiving recapping the continued weak path for energy in the markets and reviewing a light load of macro data for the week of Nov. 15-19. Sam cites speculation about tapping the Strategic Petroleum Reserve, discussed in last week’s episode*, as detracting from portions of the energy sector (2:38). Bitcoin, up about 100% on the year, was down for the week as a possible precursor to the crypto bounce that has come during holiday seasons (7:20).
For the Question of the Week (14:07), Jeff and Sam break down the concept of financial repression, an intimidating moniker for a negative-real-yield scenario that functions as a tax on savers to the benefit of borrowers, particularly the government. Their deep dive includes discussion of the impact of such an investment environment (20:06) and coverage of some sectors that could provide positive returns (26:20), including a trio of previous QotW topics**: preferred stocks, closed-end funds and bank loans.
Jeff and Sam close the podcast by turning to the week ahead (31:39), including whether Jerome H. Powell will be enjoying Thanksgiving as the reappointed chair of the Federal Reserve or if he will be unseated by Lael Brainard (36:50). Betting markets favored Powell at about 60-40 at the end of the week. This episode was recorded Nov. 19, 2021.
*MMM Episode 41: Broad, Sticky Inflation and the Not-So “Strategic” Petroleum Reserve
https://doubleline.com/podcast/mmm-episode-41-broad-sticky-inflation-and-the-not-so-strategic-petroleum-reserve/
**Questions of the Week
Episode 26 Preferred Stocks
https://doubleline.com/podcast/mmm-episode-26-july-26-30-recap-question-of-the-week-and-outlook/
Episode 28 Closed-End Funds
https://doubleline.com/podcast/mmm-episode-28-august-9-13-recap-question-of-the-week-and-outlook/
Episode 38 Bank Loans
https://doubleline.com/podcast/mmm-episode-38-boring-beige-book-interesting-loans-and-skyrocketing-breakevens/
After reviewing the markets and macro news for the week of Nov. 8-12, Jeff Mayberry and Sam Lau turn to an in-depth discussion of the Strategic Petroleum Reserve (14:48) and proposals to not only draw down the SRP but also to revive a ban, lifted in 2015, on the export of U.S. oil. The MMM hosts note the U.S. presidents have used their executive authority to release SRP crude into the market not only to lower energy prices, as is being proposed now, but also in response to dislocations and shortages in the energy sector due to natural disasters (most often hurricanes) and wars involving oil-producing countries in the Middle East. Drawdowns have even been used to paper over the federal deficit, causing the hosts to question how “strategic” the petroleum reserve really is.
Jeff and Sam also survey the latest readings on the Producer Price Index and the Consumer Price Index as well as a variety of other inflation indicators (7:01). The verdict from those gauges, they conclude, is that rising prices are not only high but persistent, rebutting central bank officials’ earlier reassurances that high inflation would prove “transitory.” Given the accumulating data of high and sticky inflation, Jeff and Sam will be watching scheduled speeches by Federal Reserve officials the week of Nov. 15-19 for signs of a rethinking in monetary policy (38:44).
Jeffrey Mayberry and Samuel Lau cover the Nov. 1-5 week’s rise in equities, credit, a surprising easing in the 10-year Treasury yield (3:10) and slight weaknesses in Bitcoin and commodities. Notwithstanding a hiccup in commodities, Jeff sees a bullish case for the asset class. Commenting on oil’s consistent closes above $80 a barrel (7:19), he calls recent talk of $100 oil “a little far-fetched, but certainly $90 seems like it could happen depending on how supply comes out.” Then they turn to the week’s macro news, including strong readings for both ISMs: the Institute for Supply Chain Management’s reports on the manufacturing and service sectors of the U.S. economy (10:38).
For the Topic of the Week, Jeff and Sam turn to the Nov. 3 meeting of the Federal Open Market Committee (FOMC), including Fed Chair Jerome Powell’s news conference following that session of the FOMC (15:14). The podcast cohosts evaluate the Fed’s guidance on the expected pace of future tapering of the central bank’s asset purchases, including in the light of an “offsetting” volume in U.S. Treasury issuance. They poke fun at Powell’s press remarks (20:06), which were filled with examples of Yoda-like “circular logic,” “dancing around” the Fed’s meaning of “maximum employment.” Powell, they observe, seems to have learned the inside-the-beltway art of saying nothing. That said, Jeff and Sam compliment the Fed chairman for managing to message a two-month forward view on the pace of the Fed’s tapering without jarring the financial markets.
DoubleLine’s Jeff Mayberry and Samuel Lau salute both Sunday’s arrival of Halloween and the more controversial recognition of National Candy Corn Day on Saturday before running the market numbers for the week of Oct. 25-29. The last week of October delivered another strong performance from the S&P 500 Index, contributing to a strong month. Energy was down for the week but finished the month strong. Jeff and Sam break down the U.S. Treasury yields for the week with a note on how the shorter part of the curve might react to Fed Chair Jerome H. Powell’s talk on taper next week. Their market discussion wraps with the year-to-date performance of the volatile assets Bitcoin, up 115%, and natural gas, up 120%. Over in Macro Land, Jeff and Sam take a look at home price appreciation, GDP and the supply chain issues contributing to empty shipping containers and barren car dealer parking lots (10:56). Looking to next week, they preview ISM manufacturing and service numbers but predict the focus will be on Powell’s taper talk at the FOMC meeting – and how he will field questions on interest rate hikes (31:25).
After reviewing the week’s positive performance for stocks, negative performance for bonds, a boring Beige Book and a limited crop of macro news, Jeff Mayberry and Samuel Lau turn to the Question of the Week (16:31): the ins and outs of bank debt, aka leveraged loans or senior loans. Credits in this $1 trillion+ market, Sam notes, sit atop their corporate issuers’ capital structures, in fact, “senior to bondholders, both senior and subordinated bonds.” Senior loans, he points out, are floating rate, potentially attractive in times of rising rates and economic growth. However, this asset class comes with unique features and risks not typically encountered with marketable securities, including trade settlements that can take up to two weeks.
During the podcast’s review of market activity for the week of Oct. 18-22, Jeff takes note of the five-year Treasury yield (3:02) closing about 120 basis points and asks whether that will form the new floor for this part of the belly of the curve. In a related development, Sam also discusses “skyrocketing breakevens” in the Treasury/TIPS market. For upcoming macro news for the week of Oct. 25-29 (32:44), the podcast co-hosts will be on the lookout Thursday for the preliminary GDP release for the third quarter and Friday for the personal consumption expenditure deflator, the preferred inflation indicator of the Federal Reserve.
The market week of Oct. 11-15, 2021, as co-hosts Jeff Mayberry and Samuel Lau take note, witnessed a wide rally across asset classes, including commodities, bonds and stocks as measured by the S&P 500, apart from the communications services sector, which was weighed down by one of its component stocks (2:30). Turning to the Question of the Week (14:00), Sam explains the wide differences exhibited in natural gas prices moves in different markets for that commodity around the world. On the inflation front, while consumer and producer prices In September posted impressive gains relative to past years (10:42), the co-hosts surmise that those increases were below market expectations . The coming week of Oct. 18-22, Messrs. Mayberry and Lau note, has little in the way of scheduled macroeconomic news, although they’ll be curious to see what surfaces from the Wednesday release of the Federal Reserve’s Beige Book summary of economic activity (31:17).
After wrapping up the market and macro news of Oct. 4-10, Jeff Mayberry and Samuel Lau explain Triple Witching Hour and its cousins: the Double Witching Hour and the erstwhile Quadruple Witching Hour (13:02). The week of Oct. 4-8 brought with it temporary action to fund the federal government, averting the possibility, however remote, of a default by the U.S. Treasury on its obligations. The podcast hosts, speaking intraday before the close, discuss a breakout above 1.50% for the 10-year Treasury yield (2:18), although Jeff points out that the 10-year bond has a way to go before reaching 1.74%, its high for calendar year 2021. The podcast hosts note the T-bill market’s response to the debt ceiling theatrics (7:34).
A mixed bag of positive and disappointing news on the jobs and unemployment front (8:24) had Jeff and Sam asking about the implications for a possible tapering of asset purchases by the Federal Reserve. Looking ahead, for the week of Oct. 11-15, among other data points, Jeff and Sam will be looking for how the Consumer Price Index for September compares to expectations of a year-over-year rise of 8.8% and what is to be gleaned from the release of the next batch of FOMC minutes.
Jeff Mayberry and Samuel Lau start off this MMM episode with a review of asset class performances for the month of September, including a 4.6% drop in the S&P 500. After guidance from Federal Reserve officials on tapering quantitative easing, the podcast hosts take note of mixed signals from the U.S. Treasury yield curve (3:19). For example, they observe that the long bond sustained its breakout above the 2% level while the 10-year yield settled below 1.50% after exceeding that level earlier in the week. For the Question of the Week (17:09), Jeff and Sam chew through a raft of research papers written convoluted Fed speak in their effort to put into plain English the Fed’s calculation and use of R-star. So how warmly will Fed policymakers follow through on their taper rhetoric? For part of the answer, Jeff and Sam look to the Oct. 8 release of the next nonfarm payrolls data and how close hiring comes to matching an expected increase of 500,000 for September (37:35).
DoubleLine’s Jeff Mayberry and Samuel Lau run down market and macro events for the Sept. 20-24 week, which ushered in the autumnal equinox and a new regular feature to the podcast, a deep dive into the week’s Federal Open Market Committee (FOMC) meeting. The S&P 500 was up for the week, led by the energy sector, which reclaimed the crown of sector of the year with its nearly 40% rise in 2021 (2:07). Bitcoin got some bad news from the crypto crackdown in China, which also caused waves with the Evergrande development crisis (4:47). On the macro front, PMI manufacturing and service numbers were strong, while Fed Chair Jerome H. Powell’s Friday listening event didn’t produce any headlines (7:35). Jeff and Sam launch the inaugural edition of their FOMC meeting deep dives, which will continue as long as the Fed keeps its heavy hand in the market (12:55). Big takeaways from the meeting include dot plot movement and a taper date set for November, as the Fed said its inflation and employment numbers have been met. Jeff and Sam note, however, that Powell stated the Fed will also look at the “broader environment” before tapering, and events such as Washington’s looming vote on the debt ceiling could affect the timeline. Looking ahead, next week’s deliveries will include data on durable good and housing price appreciation, and the personal consumption expenditures deflator (29:58).
After reviewing market and macro news for the week of Sept. 13-17, co-hosts Jeff Mayberry and Samuel Lau take up the Question of Week to explain the phenomenon of stagflation, the dilemma of high inflation amid a weak economy that last confronted the U.S. in the late 1970s-early 1980s (11:20). Jeff and Sam also share their reasons why they expect inflation to run above 5% for the foreseeable future (19:02). Sam expresses his doubts (22:20) about whether Federal Reserve Chair Jerome Powell will live up to his assurances about the central bank’s wherewithal to tamp down inflation in the event of a problematic deterioration in consumer purchasing power. On a related note, the podcast hosts will be watching the Federal Open Market Committee meeting and Powell’s related news conference, Wednesday Sept. 22, for any hint of taper talk (25:53).
After reviewing a red week for stocks, gold (almost -2%) and Bitcoin (almost -9%) and a flat week for bonds and commodities, Jeff Mayberry and Samuel Lau size up the impact on housing evictions and rents, as well as the possibility of durable follow-throughs into inflation gauges, after the U.S. Supreme Court’s overturning of the Biden administration’s eviction moratorium (11:05). With an estimated 750,000 households facing possible eviction and 3½ million households behind on their rent, the ruling stands to have significant economic and social repercussions, but those will take time to emerge.
Given listener interest in the in’s and out’s of U.S. Treasury auctions, Jeff and Same discuss the tone the Sept. 9 Long Bond auction (3:18). The auction brought $24 billion of Uncle Sam’s 30-year IOUs to market; the Long Bond “traded through”: nearly 2 basis points below its pre-auction level. That’s “a sign,” Jeff notes, “that demand exceeded dealers’ expectations.” The co-hosts consider Treasury Secretary Janet Yellen’s alarm bells to Congress over the national debt ceiling deadline, and … they roll their eyes (27:21).
After reviewing macro and markets for the week, Jeff Mayberry and Samuel Lau turn to MMM’s Question of the Week and delve into the workings of U.S. Treasury securities auctions (17:28). These connect the U.S. government with buyers of Uncle Sam’s bonds, notes and TIPS. The co-hosts explain how individuals as well as institutions participate in these auctions, how ultimate security prices and yields are set and how to measure an auction’s “success” or “failure.”
Data prints on both the Federal Housing Finance Agency and Case-Shiller house price indices showed U.S. house price appreciation remained hot (7:16), signifying, as Sam Lau notes, “pain for buyers and bliss for sellers.” With demand for manufactured product outstripping supply, Jeff Mayberry sees in the latest ISM readings signs of continued strength in the manufacturing sector (8:44). A big miss in nonfarm payrolls (11:43) has the co-hosts discussing whether the Federal Reserve will push back taper talk to later in the year.
DoubleLine’s Jeff Mayberry and Samuel Lau try to pin down when this brutal summer will actually end – they go with Sept. 22 – before jumping into their coverage of the Aug. 23-27 market week. Jeff and Sam note that the markets seemed to like what Federal Reserve Chair Jerome H. Powell said about tapering asset purchases and how he said it in the major macro event of the week. Sam rates the first 15 minutes of Powell’s 20-minute policy symposium speech a snoozefest with reiterations of previous topics and stances (starts at 10:44). But the highlight of the event was Powell’s reveal that he is among the Fed members who could see tapering beginning before year’s end. Jeff and Sam discuss the differences between this announcement and the lead-up to 2013’s Taper Tantrum, pointing out that listeners to the MMM podcast shouldn’t have been surprised. For the Question of the Week (18:35), they look at the work of another duo, the Sam-friendly short paper “Surging House Prices Expected to Propel Rent Increases, Push Up Inflation” by Xiaoqing Zhou and Jim Dolmas, senior economists at the Federal Reserve Bank of Dallas. Jeff and Sam discuss the findings, including the weighting of owners’ equivalent rent in the Consumer Price Index and the comparable metric in the Personal Consumer Expenditures Index*. Looking ahead, next week’s deliveries will include reports on housing prices and job numbers. This episode was recorded before market closing on Aug. 27, 2021.
- The paper can be found here: https://www.dallasfed.org/research/economics/2021/0824
** Jeff and Sam discussed these metrics in detail in the Episode 13 QoW (April 26-30): https://doubleline.com/podcast/monday-morning-minutes-recap-of-the-april-26-30-market-week/
After reviewing macro and markets for the week, Jeff Mayberry and Samuel Lau take a close look at the Conference Board’s Leading Economic Index (LEI), a composite of 10 indicators used to anticipate turns in the economic cycle (13:07). The podcast co-hosts assess the LEI’s predictive track record since its inaugural print in January 1996, and they analyze its components. Those constituents have changed over time. The most recent such change was the substitution of the M2 money supply with the Leading Credit Index (20:47).
The week of Aug. 16-20 was a relatively quiet one for U.S. stocks (slightly lower) and bonds (slightly higher). Jeff Mayberry, however, notes energy equities, a persistent frontrunner YTD, were the worst performer on the week (6:23), ceding leadership to real estate and financial stocks. Commodities ended the week mostly in the red (4:22). The week’s $5 decline in West Texas Intermediate crude to $62 a barrel, Samuel Lau observes, reflected reduced travel and mobility, particularly in China, due to the spread of the Delta variant of the COVID-19 virus (4:45).
The Aug. 18 release of the FOMC minutes (9:49), Jeff and Sam noted, raised the possibility, if the broad economic recovery continues, of a commencement of tapering by the Fed of asset purchases later in this year. That compares to market expectations of reduced QE starting in 2022. If the Fed does decide to taper this year, Mayberry notes, Fed Chair Jerome Powell doesn’t have a lot of “runway” to prepare the markets. So perhaps, the cohosts speculate (30:17), Powell will signal how he’s leaning in his next scheduled public appearance: 4 pm Eastern/1 pm Pacific Friday Aug. 27 on the Kansas City Fed’s YouTube channel.
DoubleLine’s Jeff Mayberry and Samuel Lau kick off their review of the Aug. 9-13 market week with some sly commodity futures humor before running through the indexes and expressing their strong aversion to surveys. Materials and financials led the S&P 500 Index; over in commodities, gold was actually up. On the macrofront, JOLTS registered an uptick in job openings while the CPI data provided support for both the transitory and persistent positions on inflation. For the Question of the Week (starts at 9:19), Jeff and Sam return* to the topic of options for yield-seeking investors with a discussion of closed-end funds. The duo breaks down how they operate, their inherent risks, and how they compare to open-end and exchange-traded funds. Looking ahead, Jeff and Sam expect another slow summer week. This episode was recorded before market close on Aug. 13, 2021.
*Jeff and Sam discussed preferred stocks in the Episode 26 QoW (July 26-30) found here: https://doubleline.com/podcast/mmm-episode-26-july-26-30-recap-question-of-the-week-and-outlook/
DoubleLine’s Jeff Mayberry and Samuel Lau in their review of the Aug. 2-6 market activity, spotlight higher equities led by financials with consumer staples the one sector ending the market week in the red (5:25). Higher interest rates, with the 10-year Treasury yield ending the week near the week high (5:50), left all the components of the investment-grade Bloomberg Barclays US Aggregate Bond Index as well as high yield bonds in the red. On the macroeconomic front, the co-hosts zero in on significant healing in the U.S. labor market as evidenced by nonfarm payrolls and unemployment and underemployment rates (15:26). For the Question of the Week, Jeff and Sam cover the history and evolution of the federal debt ceiling (19:53), along the way noting how Janet Yellen flip-flopped (27:50) on the debt ceiling. On Aug. 2, Treasury Secretary Yellen warned of “extraordinary measures” if Congress failed to act on the debt ceiling and “protect the full faith and credit” of the U.S. government. Back in 2011, Jeff recalls, then-Vice Fed Chair Yellen said political jockeying over the debt ceiling “usually just turns out to be theater.”
DoubleLine’s Jeff Mayberry and Samuel Lau shrug off Jeff’s summer vacation sniffles to cover the July 26-30 market week, the last week in July (thanks, Myla!). The S&P 500 finished up for the month despite a lagging energy sector, which is still up big on the year. The Agg was up 1% on the month, and the broad commodity market was up 2%. On the macro front, the week delivered a mixed bag of data with home prices way up, another nothing burger from the FOMC and some positive prints greeted with disappointment. For the Question of the Week* (starts at 17:40), Jeff and Sam discuss preferred stocks as a source of income. They break down how “preferreds” function relative to common stock, review their poor performance during the GFC and 2020, and weigh them as a fixed income alternative. Looking ahead to the week of Aug. 2-6, Jeff and Sam expect a quiet week but are a loath to say it.
*Jeff and Sam note that the $1 trillion threshold has been broken by the overnight reverse repurchase facility, a topic raised during the Episode 18 QoW (June 1-4) found here: https://doubleline.com/podcast/monday-morning-minutes-recap-of-the-june-1-4-market-week/
DoubleLine’s Jeff Mayberry and Samuel Lau note the S&P’s rebound across the July 19-23 week after a very red Monday. Jeff points out the Rip Van Winkle dynamic of daily volatility balancing out Monday through Friday, resulting in little change week to week. Commodities and all fixed-income sectors looked positive for the week. Jeff and Sam discuss the U.S.’ shortest recession – March 2020 to April 2020 – a two-month event that took 14 months to declare. Macro metrics were light for the week but the ones that came in were mostly expansionary. For the Question of the Week (starts at 16:32), they break down the copper-gold ratio as an economic indicator and how it performs in a period of QE. The week of July 26-30 will be busy on the macro front, with many indicators rolling in and an FOMC meeting. This edition of Monday Morning Minutes was recorded before market close July 23, 2021.
DoubleLine’s Jeff Mayberry and Samuel Lau in their review of the July 12-16 market activity observe that the S&P 500 finished down 1% for the week, with most of that decline arriving Friday. Small caps got crushed relative to everything. The Agg finished up for the third week in a row, and commodities closed up despite energy’s poor performance. On the macro front, headline and core CPI were up, with Jeff and Sam noting the window is lengthening for what some market observers call “transitory” inflation. For the Question of the Week, they explain the term “bear flattener” and how it relates to the economy (starts at 18:43). For the week of July 19-23, Jeff and Sam hope for a sleepy summer week as the FOMC goes dark, and they expect positive LEI and PMI readings. This edition of Monday Morning Minutes was recorded after market close July 16, 2021.
DoubleLine’s Jeff Mayberry and Samuel Lau in their review of the July 5-9 market activity take note of parallel performance by the stock market’s bond proxies, real estate and utilities stocks, with U.S. Treasuries, including the yield on Long Bond back below the “magical 2% number.” The week’s macro releases contained few surprises. The release of minutes of the Federal Open Market Committee turned out to be “a nothing burger.” For the Question of the Week, Jeff delves into the logic and usefulness of studying monetary velocity as an indicator of the economy in general and of inflation in particular. For the week of July 12-16, Jeff and Sam will have their eyes open for consumer and producer price index prints for June, jobless claims and retail sales. This edition of Monday Morning Minutes was recorded after market close July 9, 2021.
DoubleLine’s Jeff Mayberry and Samuel Lau take note of the strong showing in the second quarter for commodities and U.S. equities, with growth stocks massively outperforming their value counterparts. On the macro front, taking note of nonfarm payrolls and the latest U-3 and U-6 unemployment readings, Jeff notes that “the labor market has a long way to go but at least it’s moving in the right direction.” Sam tackles the Question of the Week, which focuses on special purpose acquisition companies (SPACs) and the dramatic growth in SPAC deal volume in 2020 and 2021 year-to-date. For the post-holiday market week starting Tuesday July 6, Jeff and Sam await the Wednesday release of the Federal Open Market Committee minutes for insight into Federal Reserve officials’ leanings with respect to tapering the Fed’s balance sheet.
DoubleLine’s Jeff Mayberry and Samuel Lau cap off the first week of summer – and the last full week of the first half of the year – reviewing a week-over-week reversal for June 21 through 25 as most of the markets ended up, including an all-time high for the S&P 500 Index. Commodities also were in the green for the most part in the run-up to this week’s crop report, leading to talk of the 1983 Eddie Murphy classic “Trading Places,” in which the report plays a big role. Jeff and Sam give two thumbs up, but no $1 bets are made. For the question of the week (starts at 14:53), Jeff and Sam field a multipart question on the impact of the Fed hiking the interest on excess reserves (the announcement was covered in the previous episode). Topics discussed include how the hike eases downward pressure on short-term interest rates, what it would mean if the overnight reverse repurchase agreement facility went over $1 trillion and if the policy move is a sort of stealth taper (Jeff and Sam say no).
DoubleLine’s Jeff Mayberry and Samuel Lau welcome the first day of summer (June 21) to the Northern Hemisphere with a look back at a mostly red June 14-18 market week. What began as a quiet week was derailed by market reactions to the Federal Reserve’s policy announcements June 16 (starts at 10:17). Jeff and Sam review as the question of the week what didn’t change (the federal funds range and the rate of asset purchases) and what did (the overnight reverse repurchase agreement facility, up from 0 to 5 basis points (bps), and the interest on excess reserves, up from 10 bps to 15 bps). They then break down what these changes could mean going forward, and whether Sam would call these a “plethora” of changes. Jeff and Sam also talk about how changes to the dot plot point to the Fed hiking interest rates earlier than previously expected and note Fed Chair Jerome H. Powell’s testy reaction to reporters’ dot talk. Jeff and Sam note that if interest hikes are coming sooner, taper action could also be coming sooner.
DoubleLine’s Jeff Mayberry and Samuel Lau get ready for Flag Day (June 14) with a rundown of the June 7-11 market week in which a strong CPI print was delivered, and the S&P 500 continued to climb. A dip in the 10-year yield in the face of the 5.0% rise in the CPI leads Jeff and Sam to speculate that the U.S. Treasury market has decided not to fight the Fed and has joined the “inflation is transitory” camp. Jeff and Sam try to add some insight into the transitory-inflation debate with a look under the hood of the CPI as the question of the week (starts at 14:32). They use the Federal Bank of Atlanta’s component categories of sticky (dependent on the frequency of price changes) and flexible (dependent on current economic factors and, thus, definable as transitory). Not surprisingly, they find whether components qualify as sticky or flexible is open to debate.
DoubleLine’s Jeff Mayberry and Samuel Lau ignore L.A.’s June gloom to review the short, positive market week of June 1-4 that was busy on the macro front and might have set a record for the mention of records. Sam’s take from the previous episode on a rise in crude prices was borne out, and Jeff shares some positive numbers on manufacturing, services and unemployment, including improvement in the long-term unemployed category. For the question of the week (starts at 15:10), the two answer questions from listeners on the operation and purpose of the Fed’s overnight reverse repurchase agreement facility, a QE tool created in 2014. The duo also fondly recalls the DoubleLine pre-pandemic observance of Pizza Friday, and, as always, they are happy just not to be negative.
After a review of month- and year-to-date bond, stock and commodity returns through May 28, Jeff Mayberry and Samuel Lau turn to the question of the week: how they form their outlooks for future bond and stock returns over the long term (starts at 11:30). While all models and indicators are subject to potential mistaken assumptions, certain metrics used thoughtfully can provide useful frameworks for setting long-term return expectations for asset classes. The co-hosts discuss such tools as Professor Robert Shiller’s cyclically adjusted price-to-earnings (CAPE) ratio for stocks, Dr. Shiller’s more recently developed excess CAPE yield, risk-free (U.S. Treasury) rates relative to inflation and, for bond investments, the yield-to-duration ratio, aka the Sherman Ratio, named after DoubleLine Deputy Chief Investment Officer Jeffrey Sherman. Although the post-Memorial Day market week of June 1 will be an abbreviated one, Jeff and Sam note it will be charged with significant macroeconomic releases and events.
DoubleLine’s Jeff Mayberry and Samuel Lau re-emerge from their cocoons to open the spigots on taper talk, discussing the Federal Open Market Committee’s recent meeting minutes and the use of the euphemism “adjusting the pace of asset purchases.” They also weigh the likelihood that nonvoting members are being used to test the market’s reaction to the idea that it is time to think about thinking about tapering (this is not a conspiracy theory). For the question of the week, the duo provides context for their takes on taper talk with a historical rundown on the Federal Reserve’s quantitative easing (QE), from policies enacted amid and after the Global Financial Crisis to the moves made in response to COVID-19 turmoil (starts at 12:54). Mayberry and Lau also review the May 17-21 market week, including a down week for energy and whether transitory is the new T-word.
DoubleLine’s Jeff Mayberry and Samuel Lau spend the last Friday before Tax Day (Lau: “Pay your fair share”) discussing ways to approach equity risk premia dynamics, which are used to value the equity market, for the question of the week (starts at 16:54). With help from the firm’s equity team, the duo present valuations that rely on backward-looking data, discussing the work of Ed Yardeni as well as Professor Robert Shiller and the CAPE® Ratio. They also talk about the model of Professor Aswath Damodaran, which incorporates forward-looking measures. These models prompt Mayberry and Lau to caution that participating in the equity market means being exposed to market sentiment in the Era of Acronyms: FOMO (fear of missing out) and TINA (there is no alternative). They look forward to a quiet macro week while sticking by the Lau-coined wisdom: “Hold in May and stay that way.”
DoubleLine’s Jeff Mayberry and Samuel Lau parse the week’s macro and market activity, including the price of copper marking an all-time high, value stocks tacking on another week of outperformance versus growth and Friday’s spike in 10-year Treasury volatility on the heels of a disappointing nonfarm payrolls report for April. For the question of the week (starts at 15:53), they dive into data-driven models and other tools used to forecast gross domestic product and discuss how to interpret these indicators.
DoubleLine’s Jeff Mayberry and Samuel Lau cover in the question of the week how shelter is tracked as a service for homeowners via the use of the owner’s equivalent rent (OER) component of the Consumer Price Index (CPI) and the imputed rental value component of the personal consumer expenditures (PCE) index (starts at 12:55). The duo looks at how OER and imputed rental value impact inflation metrics, noting that the PCE index is the Federal Reserve’s preferred inflation gauge. Plus, they review the April 26-30 market week, voicing an appreciation for Fed Chair Jerome H. Powell’s deft hand with a ho-hum press conference.
In this installment of Monday Morning Minutes, DoubleLine portfolio managers Jeff Mayberry and Samuel Lau discuss the April 19-23 market week, including quiet U.S. bond and stock markets and strong price moves in commodities, led by corn and Kansas wheat. They also explain why April 26-30 might prove more volatile than the previous week. For the question of the week (starts at 6:28), Jeff and Sam analyze the supply and demand fundamentals of the crude oil market and why they are cautiously positive on the price of the black gold in the months and quarters ahead. That outlook comes with the caveats that the economy continues to recover and oil production remains disciplined.
DoubleLine’s Jeff Mayberry and Samuel Lau share some straight talk on reading the real and nominal yield curves in the question of the week (starts at 14:26), and look at what market signs might foretell the Federal Reserve hiking interest rates. Plus, the duo reviews the quiet April 12-16 market week, including U.S. Treasury yields underwhelmed by positive news.
This Minutes episode offers a library list about liars, operators, turtles and gods. After recapping the quiet April 5-9 week in the commodity, equities and fixed income markets, Jeff Mayberry and Sam Lau, answering the question of the week (starts at 10:44), provide the DoubleLine investment team’s favorite books for financial literacy. They also give what to watch out for next week. High up on that will be Fed Chairman Jerome Powell’s appearance this Sunday on 60 Minutes. “There’s a whole lot of ways,” Sam notes, “to get off script in that 60-minute timeframe. So stay tuned on that one!” Jeff replies, “We’ll have to watch the futures market to see how stocks are reacting.”
Monday Morning Minutes: Market Recap for the week ending April 1, 2021
U-3? U-6? How do the unemployment and job numbers work? DoubleLine’s Jeff Mayberry and Samuel Lau discuss how to make sense of the labor force data during the pandemic in the question of the week (starts at 23:13). In addition, the duo review the short March 29-April 1 market week, including strong numbers for risk assets in Q1 2021.
Monday Morning Minutes: Market Recap for the week ending March 26, 2021
What are the implications for banks and money markets with the Fed’s elimination of the exemption to the supplementary leverage ratio (SLR)?
Monday Morning Minutes: Market Recap for the week ending March 19, 2021
What is LIBOR and why is it important?
Monday Morning Minutes: Market Recap for the week ending March 12, 2021
What are markets and metrics are telling us about inflation?
Monday Morning Minutes: Market Recap for the week ending March 5, 2021
What is a Commodity Super Cycle, and are we in one?
Monday Morning Minutes: Market Recap for the week ending February 26, 2021
DoubleLine’s Jeff Mayberry and Samuel Lau review the week of Feb. 22-26 with their screens awash in red, with the S&P 500 down for the week and the Russell 1000 Growth Index falling negative on the year. The rough week for risk came as securitized yields rose at times at a fast and furious pace before settling down Friday, leaving Jeff and Sam to question whether the yields had decided to challenge Fed Chair Jerome Powell’s pledge to focus on job creation. For their question of the week (starts at 21:03), Jeff and Sam look at the strong home price appreciation throughout the pandemic, a shock amid recessionary conditions. COVID-19 conditions have contributed to the historically tight housing supply, including the WFH shiſt and the difficulty of house hunting while maintaining safety protocols.
Monday Morning Minutes: Market Recap for the week ending February 19, 2021
DoubleLine’s Jeff Mayberry and Samuel Lau kick off their review of the week of Feb. 15-19 with a look back a year ago at the S&P 500 high of 3,386 that preceded the volatility of the COVID-19 era, which is now showing more signs of recovery. For the just-concluded week, analysts seem to be buying into the optimism around the retail sales report while IG Land continues to lag aſter a strong 2020 (“The last shall be first, and then the first shall be last”). Jeff and Sam double up on reader questions about short-term bond performance and pre-indicators of bond activity (starts at 22:16). Jeff explains his use of the copper-gold ratio, but they note that the Fed’s bond purchases and bitcoin’s arrival as a safe-haven rival to gold could be impacting readings.
Monday Morning Minutes: Market Recap for the week ending February 12, 2021
DoubleLine’s Jeff Mayberry and Samuel Lau review the week of Feb. 8-12, highlighting the link between Silver Thursday and Super Bowl Sunday (think Lamar Hunt), betting on Las Vegas dealers’ knowledge of the global economy and wondering if China’s digital-currency lottery will pay off. Jeff and Sam dive into a listener’s question (starts at 26:00) on portfolio asset allocation and asses the risk-yield profiles of investment grade corporate credit while rechristening high yield bonds as “junk bonds.” On the market front, Sam points out the recently witnessed rare spectacle of companies beating earnings expectations but underperforming the S&P 500 Index.
Monday Morning Minutes: Market Recap for the week ending February 5, 2021
DoubleLine’s Jeff Mayberry and Samuel Lau kick off the inaugural episode of their new podcast on which they will cover surrounding market and macro moves as well as interesting events of the past week and the week ahead. For Feb. 1-5, the duo discusses the strong performances of small-cap stocks and the surprising energy sector. On the macro front, they see signs of an expanding economy in rival manufacturing indexes while unemployment numbers remain a headwind to recovery. Jeff and Sam, who will be doing deep dives into topics suggested by listeners, take a look at the speculaton (starts at 18:02) that Reddit Army retail investors coordinated a run at physical silver and what that kind of large-scale organizing could mean for markets.