.jpg "A Busy Holiday-Shortened Week Photo")
Risk assets are showing continued strength with credit and equity markets steadily pushing higher despite pressure from the rates sell-off. U.S. bond markets will get a reprieve today as they are closed for the holiday. Last week, the 10-year U.S. Treasury closed at 4.10%, up approximately 13 basis points (bps) on the week and up approximately 32 bps on the month.1 The S&P 500 Index was up 1.11% to close at an all-time high.2 Investment-grade corporates and high yield are sitting near the tights of the year at spreads of 80 bps and 294 bps,3 respectively. Meanwhile, upcoming developments from Boeing could significantly impact credit markets, particularly if the company faces a downgrade to high-yield status.4
JPMorgan Chase and Wells Fargo kicked off earnings season with solid results on Friday.5 This week should bring more clarity regarding earnings as it is the first full week of third-quarter earnings.6 The holiday-shortened week ahead will feature a number of Federal Reserve speakers, as well as retail sales and initial jobless claims out Thursday and housing starts and building permits released on Friday.7 In addition, the Treasury will announce a 20-year bond reopening and a new 5-year Treasury Inflation Protected Security.8
Sources:
1,3,Bloomberg
2Charles Schwab – Closing Market Update - New Highs to End Week with Bull Anniversary Near; 10/11/24
4Reuters – Boeing weighs options for raising cash as ratings downgrade looms, sources say; 10/9/24
5,6Charles Schwab – Opening Market Update - Holiday Mood: Flat Start Belies Busy Week Ahead; 10/14/24
7MarketWatch – U.S. Economic Calendar; as of 10/14/24
8Treasury Direct – Auctions; as of 10/14/24
< 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.
