Market Commentaries

Market Summary & Relative Value of (Municipal) Bonds

August 2021

The two main ingredients determining long-term bonds yields are future growth and inflation expectations. Yields have dropped significantly the past number of months as investors have come around to the Fed’s view of high inflation as transitory and th …


Municipal Bond Past, Present & Future | 2020’s Stress Test and What Lies Ahead

June 2021

The past year and half presented many challenges, but also a multitude of silver-linings and learning experiences. Within the municipal bond market, the experience verified the sector’s overall creditworthy reputation and balance sheet sturdiness. Fede …


Perspective for Advisors: Muni Duration & Sharpe Ratio Analysis

April 2021

Municipal bonds are known for their credit preservation characteristics (and certainly have proved their worth during today’s crisis), but another less known attribute of the asset class is their ability to mitigate duration.1 Duration is one of the pr …


2021 Municipal Outlook and Year-end Review

January 2021

Apparent Risk in Municipal Bond Land In December 2019 we released Unapparent Risk in Municipal Bond Land which recapped a solid year of performance and warned investors of the underlying risks within the municipal market. We did not expect those risks …


Perspective for Advisors: Opportunity in Taxable Municipal Bonds

December 2020

Taxable municipal bonds (taxable at the federal – and oftentimes state – income level) have historically lacked investors’ attention due to limited supply and presence in a market dominated by investors seeking non-taxable income. Supply has skyrockete …


Update: COVID-19 and its Impact on Municipal Credit (Part III)

September 2020

September 28, 2020 In Part III of our municipal credit commentary pertaining to the health and economic crisis brought on by COVID-19 we overview the most recent data available pertaining to state revenue surveys and data from municipalities within the …


Perspective for Advisors: Separately Managed Accounts Prove Their Worth

May 2020

In March 2020, the COVID-19 crisis caused dislocations across world financial markets. The municipal market was not sheltered from this chaos. At the end of February, tax-free yields were sub-1% out to 11-year maturities. In mid-March, municipal bond p …


Unique Economic Challenges of COVID-19: The Evolving Impact on Municipal Credit, Part II

April 2020

The effects of COVID-19 on the nation are far different than prior natural disasters in the recent history of the United States and continue to evolve with each day. We are still learning and reacting. The national impact is significant as evidenced by …


Keeping Calm and Carrying On

April 2020

I hope you and your families are well. I hope everyone is safe. The current state of affairs all of us face is fluid, so I want to provide you with periodic updates. Thankfully to date, the entire Bernardi Securities team remains healthy, safe, and eng …


COVID-19 and its Impact on Municipal Credit (Part I)

March 2020

We would be remiss to not wish each of our readers and clients safety and peace of mind during these most trying times. Following Governor Pritzker’s “stay-at-home” order, we want to let you know our firm will remain open via remote access operations a …


Support and Guidance for our Clients, Bernardi Team Members and Colleagues

March 2020

Good afternoon everyone. We are all experiencing unprecedented events and uncertainty resulting from the COVID-19 health threat. I am writing to provide a brief summary of actions we undertook last week to ensure our firm remains fully operational to s …


Finding Relative Value in the Municipal Market

March 2020

Contagion risk is gripping society and financial markets alike. Year-to-date the S&P 500 is down nearly 15% while oil dropped 25% yesterday alone. Treasury bond yields have dropped precipitously and at one point every rung of the Treasury yield cur …


Unapparent Risk in Municipal Bond Land

December 2019

2019 municipal bond market performance has been stellar as its safe-haven status persisted in a year packed with monetary policy easing from global central banks. The Bloomberg Barclays long-term tax-exempt index is up 7.54% YTD.[1] While 4Q informatio …


RE: Wall Street Journal’s “Your Stock Trades Go Free but Your Cash Is in Chains”

October 2019

Jason Zweig’s October 4th article underscores that transactions costs should not be the only metric investors use to evaluate investment platforms. Additionally – and as importantly – they need to consider opportunity costs, the portfolio management pr …


Bond Portfolio Strategy in a Booming Market

September 2019

“Negative nominal interest rates are contradictory in an expectations-driven liquidity trap, unless they are able to eliminate deflationary expectations altogether…This paper has shown that negative interest rates are likely to make things worse in an …