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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.

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.

Animal Spirits Reignite as M&A Activity Surges

By Scott Ellis | May 25, 2017

It has been a very strong run for the markets since the great recession in 2008/2009. The S&P 500 Index has returned over 200%1 since 12/31/08, and the U.S. High Yield Market is not far behind at over 180% (as measured by the Bank of America Merrill Lynch U.S. High Yield Index). Following such strong runs over the past 8+ years, one has to wonder how much longer this can be sustained.

Is the Trump Trade in Equities Over?

By John Swarr | May 11, 2017

Donald Trump’s election to the U.S. presidency late last year started what has been termed the “Trump reflation trade,” or the “Trump Trade” for short, in the financial markets. The Trump Trade is focused on the idea that the incoming president would spur economic growth and inflation with his stances on fiscal, regulatory and trade policies, which would lead to higher equity prices, higher interest rates/lower bond prices and a stronger U.S. dollar. The market’s initial reaction to the Trump Trade was strong – yields on the 10-year Treasury increased 80 basis points (bps) to north of 2.6%, the U.S. Dollar Index (DXY) rose 6.5% to 103, and the S&P 500 Index rallied 15% to 2400 at the highs. Since hitting their post-election highs, however, only equities have kept momentum from the rally as the markets question the president’s ability to push his agenda through a divided Congress.

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.

Geopolitical Risks Upset Markets

By David O'Malley | April 17, 2017

Geopolitical issues took center stage last week as stocks fell again and Treasury bond yields dropped to their lowest level in 2017, as tensions surrounding North Korea and with Russia over the U.S. attack in Syria had market participants worried about the impact of the Trump administration’s domestic agenda.

Stocks Pull Back on Trump Administration Policy Concerns

By David O'Malley | March 27, 2017

Last week was highlighted by the Republicans’ failure to repeal and replace the Affordable Care Act (ACA). The policy setback was not well received by stocks, as the U.S. markets suffered both its worst day and week in 2017.

Washington in the Spotlight Amid Continued Highs for Stocks

By David O'Malley | February 27, 2017

Stocks continue to grind to new highs as it seems like any sell-off has been met with significant buying. Last Friday’s market activity was a great example, as the market shook off early declines to end the trading day higher. Bonds also rallied last week as the odds of a Federal Reserve (Fed) interest rate increase in March has fallen to below 40%. The market seems to be pushing the Fed to not increase rates in March, despite the recent comments by key Fed officials.

Political Uncertainties and Resilient Markets

By Zhiwei Ren | February 23, 2017

The first two months of 2016 were challenging times. Global risk assets, especially commodities, were in a free fall and the market was pricing in a global recession and possible hard landing in China. Compared to 2016, the 2017 financial market is having a great start, with all major risk assets performing well year-to-date. The S&P 500 Index has not seen a 1% drop in over 90 trading days, and 3-month realized volatility has not been this low since 1995.



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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.

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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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