Leading Signals for Recession and the Fed Funds Rate (E182)

In their review of the Nov. 4-8 market week, DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau cover election-turbocharged stocks (0:48), volatile bonds (4:01) and modest gains in commodities (6:11). After a review of the week’s macro news (8:08), including a resilient services sector, Jeff and Sam dive into Thursday’s Federal Open Market Committee meeting (10:14) and Fed Chair Jerome Powell’s news conference. Looking ahead to the Nov. 11-15 week (20:11), they will be on watch for the October prints of the Consumer Price Index (Wednesday) and Producer Price Index (Thursday) as well as jobless claims (Thursday).

DoubleLine Portfolio Manager Samuel Lau and Analyst Mark Kimbrough review the Oct. 28-Nov. 1 week of losses in stocks (1:45), led lower by tech and real estate; higher interest rates (4:03); and lower commodity prices (5:46), with energy getting pummeled. Their review of the week’s macro news (7:18) includes still strong housing prices, a strong GDP report for the third quarter and weaker-than-expected nonfarm payrolls. Looking to the week ahead (25:34), after the presidential and congressional elections, Thursday’s meeting of the Federal Open Market Committee and Federal Reserve Chairman Powell’s news conference will be topping Sam and Mark’s items to watch.

DoubleLine Portfolio Manager Jeff Mayberry and Analyst Mark Kimbrough cover the Oct. 21-25 week in stocks (0:39), fixed income (1:57) and commodities (3:36), then turn to the week’s light macro calendar (4:31), which included a mostly “stable” and “positive” Beige Book release by the Federal Reserve. The week of Oct. 28-Nov. 1 will hold more potentially market-moving news (10:42), including third quarter GDP (Wednesday); employment cost index, personal spending and income, and the PCE (Thursday); and ISM manufacturing and nonfarm payrolls (Friday).

DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau review for the week of Oct. 14-18 the stock (0:52) and bond (2:08) markets whose somewhat-muted volatility, according to Jeff, suggests investors are waiting for more labor market data and especially the outcome of the Nov. 5 presidential election. Commodities (4:01) ended in the red, led by a sharp decline in crude on reports Jerusalem will spare Iranian oil facilities in any reprisals over Tehran’s Oct. 1 missile attack against Israel. In a relatively quiet week on the macro front (5:54), retail sales came in stronger than expected. Looking ahead to the Oct. 21-25 week (11:02), Jeff and Sam will be on watch for jobless claims and purchasing manager index reports (Thursday) and durable goods orders (Friday).

DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau on Oct. 11, 2024, review equity returns (0:44) at the start of the Q3 earnings season, a fixed income market (2:14) setting to higher yields and broad commodities (4:13) lower with energy up on geopolitical risk. The markets, they note, took the week’s macro news (5:57) in stride, including slightly higher-than-expected headline and core CPI reports for September. Jeff and Sam take note of a tempering (11:11) in market pricing of future fed funds rate cuts. Looking ahead to week of Oct. 14-18, they will be on the lookout (14:35) for export and import prices (Wednesday) and retail sales (Thursday).

DoubleLine Portfolio Manager Samuel Lau and Macro Asset Analyst Mark Kimbrough begin their review of  the week of Sept. 30-Oct. 4 with a mixed stock market (0:42). The energy sector led the equity market, share prices buoyed by concerns of direct conflict between Israel and oil exporter Iran. The bond market (1:57) suffered a surge in yields. Commodities (3:39) marked gains, led by the energy complex. The week’s macro news (5:06) was dominated by “blockbuster” labor market news, with Mark Kimbrough fleshing out the details of Tuesday’s JOLTS and Friday’s upside surprises from the nonfarm payrolls and unemployment reports. Looking ahead to the week of Oct. 7-11 (24:40), Sam and Mark will be on watch for the NFIB Small Business Optimism report for September (due Tuesday) and the September Consumer Price Index (Thursday) and Producer Price Index (Friday) reports.

DoubleLine Portfolio Manager Samuel Lau and Quantitative Analyst Eric Dhall review market activity and macro news for the week of Sept. 23-27. Sam and Eric talk another strong run of almost daily historic highs for the S&P 500 Index (00:38), a flat week for fixed income (2:18) and a positive week for the Bloomberg Commodity Index despite struggling WTI crude (4:07). Over in Macro Land (6:09), they dive into a full week of prints that delivered few, if any, surprises, including the S&P Global PMI manufacturing and services reports, a resilient housing market, weakening consumer expectations and a Personal Consumption Expenditures Price Index that could support further interest rate cuts by the Federal Reserve. Next week (16:48), Minutes will have a monthly markets wrap-up as well as coverage of labor market data. This episode was recorded Sept. 27, 2024, before market close.

DoubleLine Portfolio Manager Jeffrey Mayberry and Quantitative Analyst Eric Dhall track the Sept. 16-20 week market activity leading up to and in the wake of the Federal Reserve’s big rate cut on Wednesday. Jeff and Eric look at a positive week for stocks (00:43), a down week for the Agg while the 2s10s spread de-inverted (2:00) and rising commodities boosted by energy (4:01). Over in Macro Land (5:20), prints they look at include retail sales, production numbers and what they might mean as a recession herald, jobless claims, and the LEI and its increasingly questioned data signal. They then turn to the big macro news of the week (the year?) for the Topic of the Week (9:40): the Fed’s cut of 50 basis points (bps) to the federal funds rate. Jeff and Eric talk about 25-bp versus 50-bp cut predictions, review Fed Chair Jerome H. Powell’s press conference and his talk of Fed “recalibration,” go through the Federal Open Market Committee’s Summary of Economic Projections and whether the Fed can still stick the soft landing. Looking at next week (21:37), prints will include U.S. PMI numbers; housing prices; consumer confidence; and annual revisions to GDP, which might be impacted by questions about employment data. This episode was recorded Sept. 20, 2024, before market close.

DoubleLine Portfolio Managers Jeff Mayberry and Samuel Lau cover the week of Sept. 9-13, 2024, which saw positive performances for stocks (0:30); fixed income (2:00), including a recessionary signal in the form of a Treasury yield curve de-inversion; and commodities (4:30). Topping the week’s macro news (5:35) were the August CPI and PPI reports. For their Topic of the Week (10:44), Jeff and Sam discuss the two-year Treasury as a leading indicator and the three-month T-bill as a coincident indicator of the federal funds target rate. Looking ahead (18:06) to the week of Sept. 16-20, apart from the FOMC meeting and Jerome Powell news conference on Wednesday, Jeff and Sam will be watching for retail sales on Tuesday as well as jobless claims and the Conference Board’s Leading Economic Index, both on Thursday.

DoubleLine Portfolio Managers Jeffrey Mayberry and Samuel Lau welcome back the NFL and then tackle a rough Sept. 2-6 run for the markets, including lots of red across equities (1:09); fixed income (3:04); and commodities (4:39), with even gold feeling ... Read More