Markets are opening firmer this morning following a very weak finish last week. Friday brought more uncertainty out of Washington and the concern is it will weigh on sentiment and ultimately the economy.1 First, the flash purchasing manager’s index (PMI) on Friday showed a lull in the services economy.2 Then the final Michigan sentiment report reinforced that narrative, revealing even more deterioration in confidence along with a further upward shift in inflation expectations for the next decade.3 These reports combined with Walmart earnings commentary and headlines swirling around Microsoft cancelling leases of data centers were too much for a market that is near its all-time highs.4,5
In the week ahead, investors should keep an eye on Nvidia earnings after the close on Wednesday,6 especially considering the Microsoft headlines. Friday will be key with consumer price index data from France and Germany for February, European Central Bank inflation expectations, the U.S. personal consumption expenditures (PCE) for January and the China National Bureau of Statistics PMI for February on Friday night.7 This week could also include the House of Representatives bringing its reconciliation blueprint to the floor for a vote, but that seems less likely.
Sources:
1-4CNBC – Dow drops 700 points for worst day of 2025 so far on new fears about economic growth: Live updates; 2/21/25
5Yahoo! Finance – Microsoft Cancels Leases for AI Data Centers, Analyst Says; 2/24/25
6Yahoo! Finance – Nvidia’s earning and the Fed’s preferred inflation gauge: What to know this week; 2/24/25
7Bloomberg
< 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.
