Market Commentaries
Muni Market Update: Yield Spike
April 2025An illiquidity drought has swept through financial markets leading to spiking treasury and municipal yields. Yesterday’s announcement about a tariff pause may alleviate market conditions, but municipal yields are now at 14-year highs. The Bloomberg 10- …
Muni Market Update: Elevated Yields and Ratios
March 2025A buyer’s market has emerged as tax-exempt yields hit an air pocket over the past couple of weeks, experiencing weak market conditions and, therefore, higher yields. The reason for the sell-off is due to a combination of fund outflows[1] – possibly rel …
How to Mitigate Natural Disaster Risk in Your Muni Portfolio
February 2025Our thoughts and prayers go out to every individual and family impacted by the devastating fires in the Los Angeles area. Losing a house – let alone life – is unimaginable and the rehabilitation process beyond stressful for thousands of people. …
Late Year Yield Surge & 2025 Tax Reform
December 2024Happy holidays and Merry Christmas! We wish you a healthy and happy new year as we turn the page on 2024. 2024 ended as a subpar year for fixed income returns as coupon interest was offset by a late year surge in yields. The Bloomberg Municipal Bond In …
Muni Market Update: Fairly Valued with a Hefty Supply Backdrop
October 2024Municipal tax-exempt yields maintain fair overall valuations amidst a significant pick-up in supply throughout the year. The 10-year muni/treasury ratio is 69% vs. a 5-year average of 71%.[1] As of early September, total muni supply is up 38% year-over …
Cash vs. Bonds
July 2024With money market fund rates of 5% taxable and over 3.25% tax-exempt (5.15% TEY1), maintaining high cash balances is enticing. However, this is not an attractive long term investment strategy and will be a temporary mirage once rate cuts commence. In t …
Forty Years of Municipal Bonds – A Letter to Our Clients, Colleagues, and Friends
July 2024INDEPENDENCE I hope Summer 2024 is off to a good start. I wish you and your family a Happy 4th of July – the day the Continental Congress approved the Declaration of Independence. Our founders were skeptical of concentrated power. They knew concentrat …
Municipal Market Update| Pick Your Spots
March 2024Persistently low supply met with sturdy demand is keeping municipal yields at bay, even as Fed rate cut projections get kicked further and further out the calendar. The nature of the demand has created a tale of two municipalities along the yield curve …
Two Strategies for Today’s Municipal Market
December 2023Here are two portfolio strategies we find attractive in today’s municipal market: Tax loss swaps Discount bonds[1] trading at relatively attractive yields Tax Loss Swaps Selling bonds is an infrequent exercise for most income-oriented investors. Howeve …
Are the Bond Vigilantes Back?
October 2023Yields moved up precipitously during the month of September as the AAA rated 10-year municipal has moved from 2.85% on August 31st to 3.52%[1] today. 3.52% is equivalent to a taxable rate of 5.58% calculated at the 37% bracket. This bond selloff (highe …
Market Anxiety From One D-Word to Another
May 2023Moody’s “Corporate Default Rate to Breach Historical Levels” Three of four of the largest U.S. bank failures have occurred in the past two months Capital One: “Credit Card Delinquencies Test Multi-Year Highs as Job Market Faces ‘Material’ Worsening. Po …
On Recent Market Turmoil and the Safety of Your Assets
March 2023On Recent Market Turmoil and the Safety of Your Assets The market volatility over the last two weeks has occurred across a broad section of financial markets with varying levels of severity. And this dynamic is likely to remain present for some time as …
Municipal Market Update: The Best Defense is a Good Defense
December 2022The Fed on Wednesday raised its target range for the Fed Funds Rate by 50 basis points (0.50%) to 4.25%-4.50%. The Fed Funds Rate (FFR) most directly impacts short term treasury rates, while bonds 5-years and beyond are primarily priced based on market …
Perspective for Advisors | Tax Loss Swap into a SMA
September 2022The market rout of 2022 has left few asset classes unscathed. The S&P 500 is down 22.51% through 9/23. While bonds have not been immune given the Fed’s 180 degree policy turn from late 2021 and persistent inflationary pressures. The 2-year treasury …
Market Update: Municipal Yield and Valuation Overview
August 2022The first half of 2022 is one of the few market environments in recent history where all major asset classes suffered. The Novel Investor blog’s Asset Class Returns captures this nicely noting “cash” outperformed with a +0.2% return. “HG Bonds” (high-g …