Friday, May 14, 2021 |
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MANAGING DIRECTOR: Scott Carrithers PORTFOLIO SALES AND SERVICE: George Morris • Chris Thompson • Sean Doherty • Kevin Doyle • Mark Tranckino Jeff Goble • Nicole Burczyk • Natalie Regan • Aaron Stoffer • David Farris • Lonnie Harris Brian Schaff • Josh Kiefer • Robert Schuyler • Tom Toburen • Aaron Hemphill |
| US Treasury Market | |||||||||||
| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 05/07/21 | 0.01 | 0.02 | 0.04 | 0.05 | 0.14 | 0.29 | 0.77 | 1.24 | 1.60 | 2.17 | 2.28 |
| 05/10/21 | 0.02 | 0.02 | 0.04 | 0.05 | 0.16 | 0.32 | 0.80 | 1.27 | 1.63 | 2.20 | 2.32 |
| 05/11/21 | 0.01 | 0.01 | 0.04 | 0.05 | 0.16 | 0.31 | 0.80 | 1.28 | 1.64 | 2.23 | 2.35 |
| 05/12/21 | 0.01 | 0.02 | 0.04 | 0.05 | 0.16 | 0.35 | 0.87 | 1.34 | 1.69 | 2.29 | 2.40 |
| 05/13/21 | 0.00 | 0.02 | 0.03 | 0.05 | 0.16 | 0.33 | 0.84 | 1.31 | 1.66 | 2.28 | 2.39 |
Observations About the Current Municipal Market
Continue to look for percentage to treasury ratios north of 80% for good value.
The steepest part of the tax-free curve is the 7-12 year range and we believe the 3%+ coupon kickers are worth considering.
Current tax-free rates are about 20-30 bp higher than the low on 2/11/2021.
Taxable high grades are yielding +15 to the USTN curve in the 4-12 year range.
June to August historically is a very busy time for calls and maturities. We expect re-investment demand to push municipal rates lower in the near term and the real prospect of higher taxes is also keeping rates lower on the tax-free side.
BQ’s continue to be in short supply, thus creating a great opportunity to sell, if that is part of your plan.
Continue to monitor your credits and pull out any that have been downgraded substantially and/or on negative watch.
There is still value to be found, but it requires patience. Remember – quality (and liquidity) remain long after the price is forgotten.
Please let us know how we can help evaluate your current municipal portfolio.
This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
•Not FDIC Insured •No Bank Guarantee •May Lose Value