Resilience in U.S. States, Cities, Health Systems, and Universities: Municipal Asset Class Review & Outlook

September 17, 2020 | Ben Mohr, CFA, Director of Fixed Income, Managing Partner, Aimee O’Connor, CFP®, Senior Vice President , Mollie Zugger, Research Associate

To date during this COVID-19 pandemic, both U.S. municipal bond issuers as well as municipal bond strategies have proven to be resilient despite the mounting adversity brought on by the nationwide lockdowns and other social distancing guidelines. The broader market recovery has been relatively quick as the S&P 500 is now back to pre-COVID highs, corporate credit spreads are back to pre-COVID tights, and overall volatility has mostly stabilized. The rebound in the economy is proving to be slow, however — with recent signs of leveling off — and is not expected to fully rebound until a vaccine is approved and distributed.

In the following, we provide a quick review of how municipal bonds have weathered the crisis so far in 2020; an assessment of key valuation, fundamental, and technical indicators to formulate a thesis for investing in municipal bonds going forward; and perspectives on how specific segments of the asset class such as investment grade municipals vs. high yield municipals and select sectors of the municipal bond market such as healthcare and education are expected to fare during the balance of the recession and recovery.

Read > Resilience in U.S. States, Cities, Health Systems, and Universities: Municipal Asset Class Review & Outlook

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Ben Mohr, CFA
Director of Fixed Income, Managing Partner

Get to Know Ben

Aimee O’Connor, CFP®
Senior Vice President

Get to Know Aimee

Mollie Zugger
Research Associate

Get to Know Mollie

Related Content

Column chart showing survey results by percentage of respondents. Chart subtitle: Market professionals respond: "How much do you agree or disagree with the following statement? Currently, there are many bubbles in financial markets." Chart description: Y-axis shows % of respondents ranging from 0-60%. X-axis shows columns by "Strongly agree, Slightly agree, Neither agree or disagree, Slightly disagree, and Strongly disagree." 37% strongly agree, 52% slightly agree, 5% neither, 6% slightly disagree, and 1% strongly disagree. Chart source: dbDIG Survey, Deutsche Bank Research. Data was released this week.

01.22.2021

Bubble, Bubble, Toil, and Trouble

In Shakespeare’s Scottish play Macbeth, three witches prophesize the protagonist’s imminent rise and fall. This week, Deutsche Bank released its…

01.21.2021

2021 Market Preview

2020 was a year like no other and has left investors across the world wondering what the future looks like….

Graphic of darkened photo of city buildings, with guidance pattern overlay and "2021 Market Preview" in white.

01.21.2021

2021 Market Preview Video

This video coincides with our 2021 Market Preview newsletters and provides a high-level summary of each,…

Chart subtitle: Projected GDP growth rates across the globe more optimistic heading into the year. Chart description: Bar chart showing Annual GDP Growth Rate on y-axis, with 2019 Actual, 2020 Projection, and 2021 Projection for (x-axis) World, United States, European Union, United Kingdom, Germany, Japan, Emerging Markets, China, and India. All categories show positive for 2019 and 2021 projection; all categories except China negative for 2020 projection. Chart source: IMF.

01.14.2021

Glass Half Full?

As we are beginning to see a possible finish line on the COVID-19 front, there is an expectation in the…

01.12.2021

Tech Bubble Revisited? Contrasting the Current Landscape with the Dot-Com Boom and Bust

Continued strong performance of technology-oriented stocks through disparate economic environments, elevated valuations, and increasing concentration within the growth space have…

Line chart showing M2 Money Stock in teal and Velocity of M2 Money Stock in green. Chart subtitle: M2 continues to grow while money velocity dips. Chart description: Left Y-axis shows $ in billions, ranging from 0-$20,000. Right Y-axis shows Velocity from 0.0-2.5. X-axis shows time since January 2000, through August 2020. Recessions are marked by shaded grey bars, denoting the dot-com bubble in the early 2000s, the Global Financial Crisis in 2008, and the current recession which began in March 2020. M2 Money Stock line begins near $4,000 in January 2000 and is currently near $19,000. Velocity line begins near 2.0 in January 2000 and is currently near 1.2. The two lines converged around October 2015. Recently the M2 Money Stock has climbed sharply and Velocity dipped significantly in 2020 but most recently slightly grew. Chart source: Federal Reserve Bank of St. Louis as of December 31, 2020.

01.05.2021

Is Velocity Stifling Inflation Amid Record Growth of Money Supply?

Inflation has remained well below 3% in the United States for nearly a decade despite a record economic expansion and…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >