The Hurdle Rate Is Back
The article highlights that the 30‑year U.S. Treasury yield has climbed to about 4.9% while the S&P 500 dividend yield stays near 1.1%, widening the spread to roughly 3.85 percentage points—the highest since 2009 and comparable to 1990s levels. This marks a return of a meaningful “hurdle rate” for risk assets, ending the post‑GFC “TINA” (There Is No Alternative) environment. Rising capital demand from AI data‑center construction, defense spending and infrastructure projects, coupled with tighter liquidity, is further pressuring equity valuations. Investors must now weigh higher bond yields against modest equity cash‑flow returns.
Jeffrey Gundlach and Felix Zulauf: The Second Inning of a Major Shift
Jeffrey Gundlach and Felix Zulauf argue that the global order is shifting from unipolar to multipolar, making wars and sanctions a permanent source of inflation. They see the current AI‑driven equity rally—where ten stocks represent 41% of the S&P 500—as...
Monster SpaceX IPO, Hot Inflation Prints and New Fed Chair With New Ideas (E265)
DoubleLine hosts Eric Dhall and Ryan Kimmel recapped the week of June 8‑12, highlighted by SpaceX’s historic IPO that launched with a multibillion‑dollar valuation despite zero profits. The equity market showed modest gains and wide dispersion, while fixed income rallied on...
Strong Jobs, Higher Hike Risk
The latest U.S. nonfarm payroll report showed a gain of 172,000 jobs, lifting the six‑month average to 92,000 and pushing leisure and hospitality employment up by 70,000. The surprise prompted the 2‑year Treasury yield to breach 4.1%, reviving market expectations...
Good News for Labor Proves Bad for Stocks (E264)
DoubleLine analysts Jeff Mayberry and Mark Kimbrough highlighted a sharp sell‑off across tech, consumer discretionary and communications stocks during the June 1‑5 week, driven by a surprisingly strong May payrolls report. Bond yields flattened and most commodities weakened, except for energy,...
Record Highs, Record Doubts
The S&P 500 hit record highs in May while the University of Michigan Consumer Sentiment Index fell to an all‑time low of 44.8. The blog attributes the split to a K‑shaped recovery where equity gains favor wealthier households, whereas lower‑income...
Animal Spirits, Abating Vigilantism Amid Headline Ping Pong (E263)
DoubleLine’s Eric Dhall and Ryan Kimmel recap May’s market moves, noting that a handful of tech giants propelled the S&P 500 to fresh record highs while bond yields eased but remained above early‑month levels. Commodities, led by energy, slipped as geopolitical...
Commercial Mortgage Loans: Building Around the Insurance Balance Sheet
DoubleLine portfolio managers Morris Chen and Robert Stanbrook explained on the InsuranceAUM podcast how commercial mortgage loans (CMLs) can be engineered to match the unique yield, duration, rating‑migration and capital‑efficiency requirements of insurance balance sheets. They highlighted the flexibility of...
Tech Dominates Stocks, Treasuries Trade on Oil (E261)
DoubleLine’s May 8 "Minutes" episode highlighted a market still powered by a handful of mega‑cap tech names, which continued to outpace all other equity sectors. Meanwhile, Treasury yields moved in lockstep with oil price swings, reflecting lingering geopolitical risk. Commodities posted...
Ken Shinoda on Housing, CRE and the Case for Carry | Bloomberg TV
Ken Shinoda, DoubleLine’s structured‑products manager, told Bloomberg TV that the 30‑year fixed mortgage rate’s rise to 6.4% has created a compelling credit backdrop for agency mortgage‑backed securities. After a long period of underperformance versus corporates, agency MBS are rebounding and offer...
Jeffrey Gundlach on Private Credit's Wild West and a U.S. Debt Tail Risk | Bloomberg TV
DoubleLine CEO Jeffrey Gundlach warned that private credit is entering a “Wild West” as fast money overwhelms the market, predicting a wave of redemption requests from interval funds around June 5. He dismissed the notion that illiquidity is intentional, calling...
Bill Campbell on Global Bond Markets and Powell's Parting Gift | Bloomberg TV
Bill Campbell of DoubleLine warns that developed‑market sovereign debt is losing its safe‑haven edge as rising deficits and larger social‑safety nets erode fiscal discipline. At the same time, emerging markets have tightened budgets, narrowing the credit quality gap and prompting...
Channel 11: Bulls on Parade
Ken Shinoda’s latest Channel 11 update declares a bullish market parade, driven by a near‑20% surge in the Nasdaq in April and strong first‑quarter earnings that beat forecasts by roughly 25%. Semiconductor spending on AI, robust PMI readings and rising commodity prices...
The Old Ceiling, the New Floor
Core CPI has moved from a decade‑long sub‑2.5% ceiling (2010‑2019) to a new floor, staying above that threshold in 57 of the last 63 months, including a 56‑month streak since April 2021. The shift reflects higher wage growth, rising unit...
April: Rebound in Stocks, Carry in Bonds (E260)
In April, U.S. equities staged a strong rebound after March’s war‑related sell‑off, while investment‑grade bonds delivered a modest positive carry despite higher yields. Emerging‑market debt outperformed other credit segments with a 2.7% return, and commodities, led by energy, rose on...