Higher Stocks and Commodities, Weaker Gold, Bonds Carry (E237)

DoubleLine Portfolio Manager Jeff Mayberry and Analyst Mark Kimbrough analyze the week ended Oct. 24 with stocks with tech leading on a benign September CPI print, fixed income eking out its carry and commodities led higher by WTI on U.S. sanctions against Russian crude oil. Gold, they note, posted its first negative week since mid-August. On the economic front, in the absence of national jobless claims data due to the federal government shutdown, Mark Kimbrough notes state-level stats suggest no undue stress in labor markets. S&P Global PMI data show an expansionary U.S. economy in both manufacturing and services sectors. Turning to the effects of the government shutdown, Mark unearths some research from the 1970s indicating that while delays in data collection probably will have little impact on the quality of the October nonfarm payrolls once that statistical series resumes reporting, biases due to poor memory recall could degrade the fidelity of the household U-3 unemployment survey and especially the CPI for the month of October. Looking ahead to the week of Oct. 27-31, Jeff and Mark will be especially interested Wednesday in guidance coming out of the Federal Open Market Committee meeting (after it is expected to lower the federal funds rate by a quarter point) and from Fed Chair Jerome Powell’s news conference.