Municipal Bonds

As the world continues to grapple with the coronavirus, some areas of the market are showing signs of incremental improvement.

Matt provides a framework that he and his team use to make sense of the headlines and the price bids flashing on their monitors. His realistic, yet hopeful outlook provides a roadmap for successfully navigating this universal crisis together.

Like everywhere else, Europe needs liquidity. And the European Central Bank is delivering that in abundance. It appears to stand ready to do more without delay when markets become dysfunctional.

Portfolios comprised of top-notch equities and bonds coming into the economic and market crises should do even better coming out of it.

The world’s developing nations have yet to experience the full effects, both economic and humanitarian, of the pandemic.

CIO Larry Adam discusses the COVID-19 outbreak and emphasizes that investors should exercise patience, not panic.

To say that a lot has changed in the last month is a tremendous understatement. The markets are playing a weak supporting role to the worst healthcare challenge in our generation, as well as the worst economic problem since 2008.

According to John Sheehan, the recent selloff in Investment Grade fixed income was exacerbated by technical factors. In his view, regulatory changes implemented after the 2008 crisis removed a critical shock absorbing mechanism that caused spreads to spike.

Even with all the benefits attributable to closed-end funds—intraday trading, low financing costs of leverage, ability to be fully invested, and consistent source of income—they have some idiosyncrasies that present challenges, especially during extreme volatility

From its all-time high on February 19, the S&P 500 hit a bottom of 2,237 on March 23. But it will go lower this year, according to Jeffrey Gundlach, and only then will he buy stocks.

Valid until the market close on April 30, 2020.

The S&P 500 closed March with a monthly loss of 12.51% after a loss of 8.41% in February. All three S&P 500 MAs are signaling "cash" and four of five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard REIT Index ETF (VNQ), Vanguard FTSE All-World ETF (VEU), and PowerShares DB Commodity Index (DBC) — are signaling "cash".

To help support investment-grade corporate bond market liquidity, the Federal Reserve introduced two facilities March 23: the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).

In order to be better prepared in the future, we need a vibrant private sector, not a permanent expansion in government.

The consequences of policymakers returning to the same tools employed in the financial crisis.

The Bloomberg Barclays U.S. Green Bond Index is down 2.5% so far this year -- far less than the 5.1% drop seen in the investment-grade, corporate debt benchmark.

The US economy will likely struggle temporarily, but the combination of aggressive monetary policy and substantial fiscal stimulus should deter the worst case scenarios from occurring. These efforts will serve as a ‘bridge’ to a place not too far in the future (hopefully June) where the virus is contained, a therapeutic response is developed and the economy returns to normality.

Russ discusses the importance of keeping perspective as we face an unprecedented crisis.

I do feel strongly that we are living through a generation-defining moment that too many are only now starting to grasp.

Not everyone sees the bottom as necessarily reached.

The economic costs associated with the coronavirus case outbreak are nothing short of staggering. Expect Q2 to collapse which is not good for equities and not good for bonds either.

Most investors are unable to grasp why the Fed’s QE actions have been ineffective. In this article, I explain why today is different from the past.

The majority of the time, when you hear someone say “I bought it for the dividend,” they are trying to rationalize an investment mistake. However, it is in the rationalization that the “mistake” is compounded over time. One of the most important rules of successful investors is to “cut losers short and let winners run.”

Michael Grant is preparing for rebound in equities and has positioned the long/short portfolio accordingly. To use a Wayne Gretzky analogy, he is skating to where the puck will be, not where it is.

The US Federal Reserve recently announced a number of measures to support the economy and markets amid the coronavirus crisis. One involves the purchase of fixed income exchange-traded funds (ETFs). David Mann, Head of Capital Markets, Global ETFs, shares his thoughts on the subject, and what he thinks is the best way to support the corporate bond market through these purchases

Relief efforts measured in trillions of dollars are bound to have some positive effect.

On Friday, Congress approved and President Trump signed into law a $2.2 trillion emergency stimulus package, the largest in U.S. history. Most American adults will be receiving a one-time payment of $1,200 in cash.

Jon Roiter reflects on a wild ride in the high-yield credit market and whether now is the time to capitalize on attractive investments in the space.

The recent price changes in the municipal bond market have potentially created an intriguing opportunity for investors; with municipal bonds selling at relatively enticing yields, even without considering the tax benefits. However, this market is likely to be short lived as investor behavior is stabilizing.

After giving our clients a few days to digest it, we’d like to share this memo from Thursday with all of our readers. We hope you’ll find it helpful.

Sierra Mutual Funds Chief Investment Officer Terri Spath's latest market commentary discusses when might be a good time to buy, and the importance of using a time-tested process, like the one used at Sierra and Ocean Park.

As both traditional and alternative asset markets descend into turmoil this month, it’s important to remember the inherent strengths of a diversified portfolio. A market rout always causes correlation to go to 1 across virtually all assets as investors flee to the perceived safety of cash.

There are three key areas where the allocation requirements of passive fixed-income vehicles have an impact on the market.

I expect that the most valuable aspect of our investment discipline over the completion of this cycle will be our ability and willingness to flexibly respond to changes in observable market conditions as they emerge.

While the country and the stock markets reel from the impact of the Coronavirus, many economists and politicians are calling for the government to fight the pandemic as if we had to fight the Second World War all over again.

With government spending helping to steer countries through the pandemic, it may not be easy to turn off the taps afterward.

The rally gained force after the White House and the Senate reached an agreement on a massive package of spending and tax breaks in a bid to prevent the swift shutdown of much of America’s economy from leading to a deep, prolonged recession.

Liquidity could remain challenged, but valuations may be attractive for long-term investors.

During these turbulent times, how does one track and value the performance of an exchange-traded fund? David Mann, Head of Capital Markets, Global Exchange-Traded Funds, opines on ways to “keep score.”

A global recession is likely through the first half of the year, with a rebound possible during the second half of 2020, provided the virus threat subsides.

The conditions for a relatively quick and robust rebound rest on the success in containing the virus within a reasonable horizon, and a well-calibrated economic policy response.

By some measures, the municipal-bond market is full of screaming buys for anyone brave enough to wade in.

That was the last time the world witnessed a sustained downturn in both emerging markets and their developed-nation counterparts.

Intellectually, I’m confident the virus will be contained, the economic stimulus (when it’s passed) will reinvigorate the economy and this crisis will pass. The market will eventually recover. Emotionally, I’m terrified.

We know a lot more about COVID-19 than we did a few weeks ago; but there remain questions that are unanswerable at this stage. We don’t know how much worse this gets before it starts to get better...

Mike explains why it may be prudent re-balancing your portfolio – outside the usual calendar – after the recent market turbulence.

With the COVID-19 pandemic still spiraling out of control, the best economic outcome that anyone can hope for is a recession deeper than that following the 2008 financial crisis. But given the flailing policy response so far, the chances of a far worse outcome are increasing by the day.

Once again, no one cares about the economic calendar. There have been big changes with more to come. While many claim to know what those changes will be, I see only speculation.

The US Federal Reserve continues to use whatever tools it can to help combat economic fallout from the coronavirus. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, calls its latest response “a whole new level” of stimulus.

The U.S. Federal Reserve unveiled a series of significant policy measures to help sustain the economy.

India will suspend all domestic flights from midnight Tuesday as part of a nationwide lockdown that threatens the country’s economy.

Much-criticized modern monetary theory (MMT) and its next-of-kin, “helicopter money,” are the inevitable measures to resuscitate the economy in the crisis it faces.

Given the magnitude, and multiple confirmations, of these signals, it is far too soon to assume the “bear market” is over. This is particularly the case, given the selloff is less than one-month old.

Research Affiliates assesses the potential impact of COVID-19 on economies and investments, and what it means for the All Asset strategies.

The economic and financial market carnage of the coronavirus continued in yet another unbearable week for investors. The S&P 500 suffered its worst daily decline since October 1987 on Monday, and has fallen ~30% from its February 19 high—the fastest decline and entrance into bear market territory in the history of the US equity market.

We have spent much of the last week talking about the efforts coming out of the U.S., as the Federal Reserve and government leaders are working hard to offset the real economic damage being inflicted by the crisis.

The municipal fixed income market, like most other asset classes, is experiencing unprecedented volatility. Large mutual fund outflows are adding to the volatility as investors seek to add to cash reserves by selling what may be deemed easiest to sell.

We entered into the current crisis with a whole financial system that had been incentivized by policymakers to take on excessive levels of debt and leverage. The turmoil we are seeing right now is the result of the unwinding of this leverage.

Here’s why the market crashes even without more bad news, like it did in October 1987 and from late 2007 through March 2009. But this time is different because there is a new set of actors on the stage, exacerbating the problem.

These extreme measures appear to be having great success, particularly in Asian countries. Whereas the number of cases continues to rise in Italy, Spain, Iran and elsewhere, the number has begun to stabilize, if not plateau, in Asian countries.

Today in the real world, we also face a dark, implacable, powerful foe. It is a microscopic virus that we now know is a threat, a very serious one. We in the United States have just seen the beacons. The warning travelled not just a few hundred miles but around the world: from China and Korea, to Italy and Spain, and now here.

The economic and financial market carnage of the coronavirus continued in yet another unbearable week for investors. The S&P 500 suffered its worst daily decline since October 1987 on Monday, and has fallen ~30% from its February 19 high—the fastest decline and entrance into bear market territory in the history of the US equity market.

Markets often overshoot, and just because things are cheap doesn’t mean they can’t get cheaper.

We expect to see a combination of anti-viral medications and vaccines develop over 6 to 12 months globally. We are seeing daily positive articles on the effectiveness of anti-virals from other countries. Vaccine development appears to be moving very quickly, and there is potential for a vaccine to get to people as soon as the end of 2020.

In an incredible reversal, investors pulled a record $12.2 billion out of municipal-bond mutual funds.

In a sign of how topsy-turvy financial assets are right now, risky high-yield bond ETFs have become relative havens and investors are fleeing government debt funds as fast as they can.

BlackRock’s CIO of Global Fixed Income and Head of the Global Allocation Team weighs in on recent Federal Reserve policy moves and what they might mean for markets.

Are municipal bond issuers vulnerable to the COVID-19 pandemic? We assess key sectors, from states to hospitals to airports.

While it is certainly hoped by many that we are closer to the end of the liquidation cycle, than the beginning, the dollar funding crisis, a blowout in debt yields, and forced selling of assets, suggests there is likely more pain to come before we are done.

Without the right programs, this shortfall in credit availability will increase and it will further deepen the crisis.

On Thursday, March 12, Rick Raczkowski, co-lead portfolio manager of Core Plus Fixed Income participated in a conference call with clients to discuss recent events and market activity. He discussed that while there is a lot of fear and uncertainty in the market right now he and co-lead portfolio manager Peter Palfrey, are maintaining their discipline of managing through the cycle as they have for the past 20 years.

On the front lines of investing, advisors have been trying to guide their clients in fathoming the gut-wrenching market correction.

A burgeoning Wall Street strategy that’s been pitched as a shelter from storms is proving anything but in this once-in-a-century market turmoil.

Here are the signs that the world is focused on liquidity above all else.

Futures are now at the lowest level in almost two decades after Saudi Arabia signaled it’s doubling down on a price war with Russia just as demand evaporates

The latest Conference Board Leading Economic Index (LEI) for February was up 0.1% from the January figure of 112.0.