Muni Credit

While Treasury and Corporate yields fell in June, Municipal yields were generally flat and actually unchanged for the last two weeks of the month, as the summer slowdown kicked in. This underperformance has brought Munis back to an attractive level vs. comparable Corporates, though not as compelling as back in March. After unprecedented outflows during the market dislocation, Muni Mutual Funds have reported seven consecutive weeks of inflows totaling over $15 billion. These inflows combined with seasonally elevated coupon and maturity payments should lead to strong demand through the summer.

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Municipals rallied significantly in May, with AAA yields moving lower or remaining unchanged in every trading day of the month. The opportunity to invest in munis that we pointed out in last month’s report was also recognized by the broader market, causing munis to return to more “fair value” levels compared to other fixed income assets. As over $3 billion in cash returned to muni funds, short-term yields fell to historic lows and the overall market posted one of its best monthly performance numbers in over 10 years. We expect muni yields to remain at these depressed levels in the…

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MuniWatch

After experiencing unprecedented stress in March due to the effects of the coronavirus, the municipal bond market has returned to more of a sense of normalcy as the new issue market begins to open and trade activity stabilizes. This report looks at forces shaping recent changes in the municipal bond market.

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Viewpoint 2019

Against a backdrop of worry over trade and rising interest rates, the United States economy continues to perform well. While equity markets generally declined in 2018, investors in the United States generally fared better than overseas. Moreover, most companies saw revenue, profits, and dividends grow in 2018, and we expect more to come in 2019. This annual Viewpoint, along with quarterly updates, provides an organized way of looking at the economy, financial markets, and your portfolio. The full report is available by clicking the link below.

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