After a short holiday week that saw equities and oil prices continue to decline significantly, the markets will be focused on this week’s G20 summit and the potential for a Brexit deal. Equities have been under pressure over the last several weeks due to concerns about trade and global growth. With a much-anticipated discussion between the U.S. and China, markets will be looking for any favorable news regarding a trade deal. In the U.K., Prime Minister Theresa May will be trying to sell the Brexit deal that she negotiated to skeptical politicians at home. At this point, the uncertainty related to these global trade factors in the coming years is more significant for markets than the short-term impact on economic fundamentals, which remain firm in the U.S. despite weakening from the robust pace of the second and third quarters.
The other key event this week is the release of the November Fed minutes. With markets still widely expecting a December rate increase, despite declining equity prices, the markets will be looking for some dovish news in the minutes about the path for interest rates in 2019. I continue to favor a defensive position in equities and a long position in U.S. Treasuries.
< Go to Monday Morning Perspectives
This blog post is for informational use only. The views expressed are those of the author(s), 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.
