February 13, 2017
The Trump “reflation” trade was re-ignited Thurs/Fri last week after the President announced that a “phenomenal” tax reform plan is in the works, causing bonds to sell off, the dollar to strengthen, and equities to reach all-time highs. Partly due to fund flows of $304 mil., Munis ended the week stronger overall and outperformed Treasuries inside 10 years (1-7 ratios), although this belies the otherwise...
We said a few weeks ago that Munis were fairly valued to somewhat cheap in spots with some room to outperform, particularly if the market significantly underperforms for a week or two. Given (mostly) outperformance since that time, especially inside 10 yrs, we now say that Munis are simply fairly valued on both a 1 yr and 3 yr basis. The 5 yr ratio is now at 80%, or 10 ratios away from bargain pricing (~90%). Muni performance from here, at least near term, depends on...
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Please find attached Ramirez & Co.’s Quarterly Macroeconomic Outlook. In our report, we continue to monitor the US economy, global events and the Fed’s outlook on the economy and rates:
Members of our Financial Strategies Group, Niso Abuaf, Konstantin Semyonov and Duncan Sinclair, would be happy to discuss further any of the material with you.Full Quarterly Report