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 deepened Monday Aug. 5. But as Mark Kimbrough notes in his review of the week’s macro news (5:00), an upbeat ISM services report “came in for the rescue,” helping to lift stocks and in general lower risk premia. “Now that you look back,” Jeff Mayberry says, “it’s pretty funny seeing all the people calling for all these emergency cuts, and now here we are, down 4 basis points on the S&P on the week.”  

Looking ahead to “inflation week” (12:13)with producer and consumer price indexes for July due Tue. (Aug. 13) and Wed. (Aug. 14), respectively, and the University of Michigan consumer inflation expectations survey (Friday). Given the markets’ anticipation of fed funds rate cuts, starting in September, Jeff Mayberry notes the week of Aug. 12 could prove volatile, particularly given vacation-loaded schedules in August. “Everyone likes to joke,” Jeff Mayberry says, “that the junior traders are on the desk and tend to overreact vs. the old hands who have been through this before.”

A Volatile Week: Much Ado about Not Much? (E177)

Monday Morning Minutes