Stocks Sell Off, Yields Rise, Energy Surges on War in Middle East (E253)

DoubleLine Portfolio Manager Eric Dhall and Analyst Mark Kimbrough cover a March 2-6 market week rocked by the Feb. 28 outbreak of war in the Middle East, related energy-supply shocks, private credit losses and labor weakness in February. Equities (0:31) sold off across the board with energy the only positive sector for the week with a mere 1% gain. Fixed income (2:52) saw Treasury yields rise across the curve with the exception of a rally in the 3-month T-bill. Bank loans (4:32) were a lone positive note in the spread sectors. Commodity indexes (6:04) surged higher, led by a 25% gain in the energy complex with spikes in oil distillates, notably a 50% surge in diesel for delivery to Europe.   On the macro front (11:16), albeit reflecting activity prior to global economy-roiling events in Iran and the Persian Gulf, ISM goods and services reports were solidly expansionary for February. Import prices ex-petroleum accelerated higher in January. Nonfarm payrolls suffered significant losses in February, even after adjusting for a strike affecting healthcare workers that has since been resolved. The week ahead will include the February CPI (Wednesday) and personal income & spending and PCE for January (Friday).