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Critical Week for Bonds

By David O'Malley | October 30, 2017

This week is a critical week for the bond market as 10-year Treasuries yields are trading above the 2.4% level that has been cited by Bill Gross of Janus as signaling a bear market. This sentiment was reinforced by Jeffrey Gundlach of DoubleLine’s comments when he called this “the moment of truth” for bonds. During the week, several key factors could significantly impact the near term movement of yields.

Underlying Employment Strength

By David O'Malley | October 9, 2017

Last week’s September employment report showed weakness in the headline jobs gained number but significant underlying strength in other measures. The economy lost 33,000 jobs for the month versus an… Read More

What Will the Fourth Quarter Hold for the Markets?

By David O'Malley | October 2, 2017

Before beginning, we would first like to extend our heartfelt thoughts and sympathies to all of those affected by the recent tragedy in Las Vegas. Equity markets ended the third quarter on a positive note as optimism about the economy and fiscal stimulus in the form of tax cuts kept stocks well bid. The fourth quarter gets off to a quick start this week with some key U.S. economic data.

Treasury Auctions and Inflation Data

By David O'Malley | August 7, 2017

Last week’s employment data confirmed the strength of the jobs market with 209,000 new jobs added during July versus an expected 180,000. The unemployment rate fell to a cyclical low of 4.3% while hourly earnings increased by 0.3% to a 2.5% year-over-year rate.

Bond Yields Rise Around the Globe

By David O'Malley | July 10, 2017

Bond yields have been rising around the globe for the last few weeks as central bankers discuss the continued normalization of monetary policy. The unprecedented monetary policy used since the financial crisis in 2008 is slowly being removed. Despite the reduction in stimulus, monetary policy is still accommodative. I expect the trend of rising rates will continue over the next few months as the supply and demand equation for debt is being reevaluated amid less support from central banks.

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.

Sell in May and Go Away?

By David O'Malley | May 30, 2017

As we reach the end of May, I was thinking of the old trading adage “sell in May and go away,” or the recommendation to sell stocks in May and buy them back in November, therefore avoiding the historic volatility that has occurred in the June to October period. Since 1950, the Dow Jones Industrial Average has returned 0.3% during the May to October period versus 7.5% in the November to April period.

French Election Alleviates Global Market Uncertainty

By David O'Malley | May 8, 2017

Yesterday the French election concluded with Emmanuel Macron defeating Marine LePen by approximately 30%. The convincing victory should ease concerns in France and across the globe that the European Union would be called into question. Macron, the centrist candidate who has a business background, now has the daunting task of trying to jumpstart France’s economy. The French unemployment rate currently stands at 10% versus 4.4% in the U.S.

Tax Reform, the Fed and April Employment Data Remain in Focus for the Markets

By David O'Malley | May 1, 2017

Last week we saw the straw outline for the Trump administration’s tax reform proposal. The initial proposal is light on details and will likely be the opening bid in negotiations. It is too early to tell if bipartisan tax reform can be accomplished or if the budget reconciliation process will be used to make temporary reforms.

PMAM CIO Mark Heppenstall on Safe-Haven Plays with CNBC “Closing Bell”

By Penn Mutual Asset Management | April 12, 2017

PMAM Chief Investment Officer Mark Heppenstall appeared on CNBC “Closing Bell” last Friday amid the day’s breaking news of a surprisingly weak March employment report and unexpected geopolitical news. He offered his thoughts on safe-haven plays, noting the markets have been quick to shake off politically-driven news from Washington D.C., but investors are still looking for safety. He points to treasury inflation-protected securities (TIPs) as an option for investors, since they pay a current income and are especially attractive as inflation pressures build.