Latest Stories

A New Normal in Collateralized Loan Obligation Reinvestment Periods

By Jason Merrill | June 29, 2017

June 2017 has been a banner month for the new issue of collateralized loan obligations (CLO) when including all three new issue types of regular way, resets, and refinancings. This month has seen 26 regular way, 18 reset and 18 refinancing deals marketed by the Street, totaling $30 billion across 62 deals. Based on our observations, Citi, Bank of America Merrill Lynch and J.P. Morgan have led the league table for the month, and investor demand in the space continues to be healthy.

Waiting for the Healthcare Vote

By David O'Malley | June 26, 2017

The week ahead has limited economic data. Durable goods were down 1.1% for May and likely fell on weaker demand for airplanes. Personal Income will be reported on Friday, and I expect it will likely remain solid, as there is not much employment slack left in the economy.

The Business Cycle Extends

By Greg Zappin | June 22, 2017

The current business cycle has become one of the longest on record, and based on our intermediate-term outlook, it could end up rivaling the 1991-2001 period in terms of its duration. Interestingly, because of the muted nature of the recovery and broader deleveraging that has occurred, the excesses that typically build as growth accelerates have not emerged, and therefore the current credit cycle is less extended.

Beware of a Flattening Yield Curve

By David O'Malley | June 19, 2017

In a much anticipated move last week, the Federal Reserve (Fed) increased short-term interest rates by 25 basis points (bps). The Fed also outlined parameters for shrinking its $4.5 trillion balance sheet. Once the process begins, it is expected to take at least four years to reduce the balance sheet by approximately $2-2.5 trillion.

Muted Wage Growth, Quantitative Investment

By Zhiwei Ren | June 15, 2017

There are many differences between the current business cycle and a typical cycle. One notable difference is the muted wage growth after years of strong job growth. In the chart… Read More

Big Week Ahead for Central Banks

By David O'Malley | June 12, 2017

Last Friday presented the first round of cracks in the stock market in recent memory. The technology heavy NASDAQ 100 Index suffered a 2.4% decline with many of the high… Read More

CMBS Market Opportunities in Risk Retention

By Jen Ripper | June 8, 2017

In December 2016, the commercial mortgage-backed securities (CMBS) market officially adopted risk retention rules as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The rules were designed to promote an alignment of interests between sponsors and investors. Risk retention requires lenders originating loans to retain a 5% slice of each CMBS deal for five years, thereby forcing issuers to have ‘skin in the game.’

May Employment Report Comes in Below Expectations and Raises Questions about the Economy and Fed

By David O'Malley | June 5, 2017

The May employment report was released on Friday and was weaker than expected. On the positive side, the unemployment rate fell to 4.3% from 4.4% in April. The current level of unemployment should be putting upward pressure on wages; however, the non-accelerating inflation rate of unemployment (NAIRU) appears to be lower than most experts predicted. Average hourly earnings, which I have been watching closely, increased by a disappointing 0.2% in May, leaving the year-over-year increase at a stable 2.5%.

Toll Roads Are Not the Road Less Traveled

By James Faunce | June 1, 2017

Many of us traveled this past Memorial Day Weekend to spend time with family and friends, and more importantly, honor all of those who have served our country so bravely. I imagine that more than a few of us utilized one of the many toll roads across the U.S. in our travels. While you may have had to skillfully maneuver around potholes in the roadway, you can take comfort in the fact the financial health of our toll roads is riding high.

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The material provided here is for informational use only. The views expressed are those of the author, and do not necessarily reflect the views of Penn Mutual Asset Management.


This material is for informational use only. The views expressed are those of the author, and do not necessarily reflect the views of Penn Mutual Asset Management.  This material is not intended to be relied upon as a forecast, research or investment advice, and it is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

Opinions and statements of financial market trends that are based on current market conditions constitute judgment of the author and are subject to change without notice.  The information and opinions contained in this material are derived from sources deemed to be reliable but should not be assumed to be accurate or complete.  Statements that reflect projections or expectations of future financial or economic performance of the markets may be considered forward-looking statements.  Actual results may differ significantly.  Any forecasts contained in this material are based on various estimates and assumptions, and there can be no assurance that such estimates or assumptions will prove accurate.

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