I decided to wait until after the Presidential debate to write this week’s post, as the potential for something totally unexpected and market-moving seemed very high.
Last week the release of the September employment report confirmed the continued moderate pace of improvement in employment. For the month, 156,000 new jobs were created, which was slightly below the consensus of 172,000. The unemployment rate ticked up by 0.1% to 5.0%, caused by an increase in the labor force participation rate. This continues the trend of the increase in labor force participation which, in my opinion, is the most important positive aspect of the report. As more people enter the labor force, it reinforces that both job gains and the expectation of future job gains have improved.
Last week interest rates continued to creep higher. The 10 year U.S. Treasury rose 12 by basis points to 1.72% while the S&P 500 Index was down by less than one percent.
I continue to expect the next few months to be challenging for asset prices as uncertainty with earnings, political risk and central bank policy put pressure on valuations. Keep an eye on any more information on the cause of last week's flash crash in the British Pound.
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.
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.
Investing involves risk, including possible loss of principal. Past performance is no guarantee of future results. All information referenced in preparation of this material has been obtained from sources believed to be reliable, but accuracy and completeness are not guaranteed. There is no representation or warranty as to the accuracy of the information and Penn Mutual Asset Management shall have no liability for decisions based upon such information.
High-Yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in higher yielding, lower rated corporate bonds have a greater risk of price fluctuations and loss of principal and income than U.S. Treasury bonds and bills. Government securities offer a higher degree of safety and are guaranteed as to the timely payment of principal and interest if held to maturity.
All trademarks are the property of their respective owners. This material may not be reproduced in whole or in part in any form, or referred to in any other publication, without express written permission.