Stocks made new highs last week as the Dow Jones Industrial Average broke above the 20,000 level on optimism for pro-growth policies from the Trump administration. The week ahead will provide the first significant update on several key central banks’ thinking for 2017. Here is what we’re watching.
On Tuesday, the Bank of Japan (BOJ) will announce its policy decision. At this point, the consensus is there will be no change in monetary policy outlook for interest rates or expected inflation. Look for any indication that the BOJ sees improvement in the economy. The BOJ is on a slow path to a rate increase in 2018.
On Wednesday, the Federal Reserve will make their policy announcement. Expect no change in interest rates, but look for more commentary on the pace of economic growth and labor market conditions.
On Thursday, the Bank of England and Governor Carney will give its first economic update of 2017. Look for commentary on the impact of the weakening pound on inflationary pressures.
After hearing from the three central banks and numerous high profile earnings reports, the week concludes with the January employment report. Expect the labor market to continue to tighten and wage pressures to continue to increase.
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.