Following months upon months of standout jobs reports, the narrative for specialty finance firm Pennymac Mortgage (PMT) seems rather discouraging, to put it diplomatically. Yes, a robust labor market is what society seeks yet it can also be a double-edged sword when dealing with inflation. After all, an increase in gainfully employed individuals translates to more dollars chasing after fewer goods – that’s inflationary.
Not surprisingly, then, traders in the derivatives market have let their voices be heard. From the face-value interpretation – and upon a closer inspection into the granularity – Friday’s pricing dynamics for PMT stock suggest that traders are overall bearish. Fundamentally, that makes sense. Based on the present economic situation, it’s uncertain whether the Federal Reserve will lower interest rates after this summer season or not.
