We expect policy will continue to drive municipal bond markets in 2018, if more constructively than in 2017. Municipal investors may remember 2017 as the year of unrealized policy fear. While the threat of tax reform and its potential to reduce the value of the muni exemption for retail investors loomed large, ultimately it had little impact on individual municipal bonds.
At the beginning of every year, a number of investment professionals at Thornburg voluntarily place their informal, internal-only bets on which three securities—from stocks to currencies or other financial assets—might together produce the best beta-adjusted returns in the year ahead.
Outcomes from the most recent state budget season, which concluded for most U.S. states on 30 June, underscore the need for caution among municipal bond investors.
The muni backdrop looks benign, but be mindful of potential credit risks.
An active approach to the complex, fragmented municipal bond market may help investors avoid several common drawbacks of passive strategies.
In many ways the filings may mark “the end of the beginning” (as Churchill once said) of this chapter for Puerto Rico.
The paper discusses a wide range of issues facing China’s economy in 2017, from the selection of Xi Jinping’s successor, to relations with U.S. President Donald Trump, to the outlook for China’s One Belt One Road initiatives in Asian infrastructure development. China’s currency volatility should continue this year, but geopolitical risks to its economy may be overstated.
Wow. Our Brexit moment! We just witnessed a political revolution in the U.S. that hasn’t been seen since Ronald Reagan in 1980. Now what do we believe this means for the markets and the economy?