Inflation

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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.

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.

Geopolitical Risks, Market Forecasts and a Tax Reform Clause

By Mark Heppenstall | August 30, 2017

While trading slowed during the summer months, as it historically does, the headlines did not! From squashed healthcare reform to placing sanctions on North Korea to the Amazon/Whole Foods deal, there was no shortage of market-moving news in the last several months. Before we unofficially say goodbye to summer next week, we checked in with CIO Mark Heppenstall for his take on what’s been happening in the news cycle and its impact on markets as well as what investors can expect leading into the final quarter of 2017.

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).

Benign Economic Environment, Low Market Volatility

By Zhiwei Ren | August 10, 2017

Low volatility has been the hallmark for this year’s market. We have seen the lowest level on record for the volatility index (VIX) and the lowest realized volatility in the S&P 500 Index. The reason we have such low volatility in the market is clear: The macro environment is very benign and investors know it.

Earnings Heat Up This Week

By David O'Malley | July 17, 2017

Second quarter earnings will receive significant attention this week, as stocks pushed to new highs on the S&P 500 Index last week. Expectations for solid earnings reports have been growing over the past few weeks and are necessary to keep stocks grinding higher.

Misery Index on Track for New Lows

By Mark Heppenstall | July 13, 2017

The Misery Index, developed in the 1960s by Yale University economist Arthur Okun, has been a widely followed measure of national economic performance. The Index is calculated by simply adding together the trailing 12-month inflation rate and current unemployment rate. This week’s chart shows a 70-year history of the Misery Index in the U.S.

Signals to Watch Through the Current Fed Rate Hike Cycle

By John Swarr | March 15, 2017

The Federal Open Market Committee (FOMC) is set to release its policy rate decision today at 2:00PM EST. The broad market consensus is the Federal Reserve (Fed) will raise the federal funds rate by 25 basis points (bps) this afternoon. However, market participants will also be anticipating the release of the “dot plot,” which FOMC members use to signal their outlook for the number and timing of future policy rate increases. The dot plot was last released at the December 2016 meeting, and the median dots showed three 25 bps rate hikes for 2017. Although the dots can help investors understand what FOMC members are thinking, the dot plot can differ from the market’s forecast of future short rates in the Eurodollar futures market.

Is the Fed Behind the Curve with Interest Rate Increases?

By David O'Malley | March 13, 2017

Last week’s strong employment report makes it almost certain the Federal Reserve (Fed) will increase interest rates by 25 basis points (bps) at its meeting this Wednesday. The February employment report showed strong gains in job creation. Non-farm payrolls increased by 235,000 for the month, which was stronger than the expected 200,000 increase and surpassed the average increase of 180,000 for the past six months. As a result, the unemployment rate decreased by 0.1% to 4.7%.

Yellen and Inflation Highlight the Week Ahead

By David O'Malley | February 13, 2017

U.S. stocks reached new highs last week amid the continued slow process of cabinet appointments in Washington and the heightened noise associated with the new administration. Business optimism was fueled by the announcement that the administration’s tax plan will be released in the next few weeks, most likely at the state of the union address on February 28.



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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