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Stocks Make a New High

By David O'Malley | September 18, 2017

The S&P 500 closed above the 2,500 mark for the first time on Friday. The markets ended a strong week of gains driven by continued favorable conditions for economic growth and the prospects for potentially bipartisan action coming out of Washington.

I’m not an Economist, But…

By Scott Ellis | September 14, 2017

I am certainly not an economist, but when a Barron’s article early in September highlighted an obscure but potentially troubling economic data point, I had to find out more. The Federal Reserve Bank of Philadelphia produces monthly coincident indexes for each of the 50 U.S. states. These monthly indexes describe recent trends and are further combined into a diffusion index value. More specifically, these indexes focus on four state-level indicators to summarize current economic conditions. The variables in this coincident index include nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average) – per the Philadelphia Fed’s website.

Unexpectedly Weak Employment Report

By David O'Malley | September 5, 2017

The nuclear test by North Korea has brought geopolitical uncertainty to a new level. As I have previously written, it is very hard to trade geopolitical risk so I prefer to stay focused on fundamentals.

Last week’s August employment report was weaker than expectations on almost all aspects. The report comes after stronger employment data earlier in the week. The ramifications of the weaker report bring the odds of a December interest rate increase by the Federal Reserve (Fed) to less than 50/50. The weaker average hourly earnings and sluggish inflation data may keep the Fed on hold until after the holiday spending season.

Uneventful Jackson Hole Meeting Leaves Markets Waiting on Economic Data

By David O'Malley | August 28, 2017

I first want to send my thoughts and well wishes to everyone enduring the impact of Hurricane Harvey in Texas.

Last week’s Jackson Hole Meeting was very uneventful from a market perspective as central banks kept their remarks very much in line with recent commentary. Janet Yellen’s speech felt more like a farewell address than laying out future Federal Reserve (Fed) policy.

Jackson Hole Conference will be Closely Watched

By David O'Malley | August 21, 2017

Beginning on Thursday, the Kansas City Federal Reserve Bank hosts its annual conference in Jackson Hole, Wyoming. The annual meeting draws central bankers from around the world, including Janet Yellen from the U.S. Federal Reserve (Fed) and Mario Draghi from the European Central Bank (ECB).

Geopolitical Risks Muddy the Economic Picture

By David O'Malley | August 14, 2017

Geopolitical risks dominated headlines last week with the increasing escalation over North Korea’s nuclear weapons program stealing most of the spotlight. The war of words that has been simmering between the U.S. and North Korea bubbled over into markets. After making new highs, the S&P 500 fell 2% late in the week, marking the first significant sell off in several months.

How Long Will our ‘Goldilocks’ Economy Under Trump Last?

By Penn Mutual Asset Management | August 9, 2017

Penn Mutual Asset Management CIO Mark Heppenstall contributed an article to The Hill where he discusses the current gridlock in Washington, the “new normal” economic environment and investment trends amid low volatility. Mark anticipates all these factors will extend the credit cycle into extra innings and enable the Fed to be patient with future rate hikes.

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.

It’s a Cruel Summer for Alpha-Seeking Investors

By Jennifer Ripper | August 3, 2017

Summer conjures up warm memories of family vacations, lazy days, endless ice cream, amusement rides, walks on the beach, barbeques, and of course, occasional heat waves. Bananarama’s summertime hit “Cruel Summer,” which touches on oppressive heat, climbed the Billboard charts in 1984. Appropriately, the music video was shot during a heat wave.

For some investors, it may seem like a cruel summer with limited opportunities to generate alpha. It certainly feels like most major markets are heating up as risk premiums continue to grind tighter, leaving investors commiserating.

Will Falling Unemployment Finally Lead to a Pickup in Wages?

By David O'Malley | July 31, 2017

Last week saw strong corporate earnings and continued growth in the U.S. economy. U.S. GDP for the second quarter was 2.6% according to the Bureau of Economic Analysis’ advanced estimate. The strength in the economy was driven by robust business investments for the quarter. Further, the failure of the Republican plan to repeal and/or replace the Affordable Care Act drove headlines last week.



Disclosure Statement

This blog post is for informational use only. The views expressed are those of the author, Dave O’Malley, 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.

Any statements about financial and company performance of The Penn Mutual Life Insurance Company or its insurance subsidiaries (each, “Client”) made by the author is provided with a written consent from the Client.  Penn Mutual Asset Management is a wholly owned subsidiary of The Penn Mutual Life Insurance Company.

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