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Tag Archives: J. R. Rieger

Dec 21, 2017

Rieger Report: Munis Show Their Power in Low Rate Environment

The 2017 low interest rate environment has created a wonderful example of the power of tax-exempt bonds. On a nominal return basis, investment grade corporate bonds tracked in the S&P 500 Investment Grade Corporate Bond Index have outperformed tax-exempt bonds tracked in the S&P National AMT-Free Municipal Bond Index. By considering the tax implications, using…

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Oct 3, 2017

Rieger Report: A Tale of Two Bond Markets

The U.S. corporate and municipal bond markets seem to be neck and neck in total return performance for the first three quarters of 2017.  However, there are distinct characteristics of both of these markets that have played a key role and could cause the performance to vary significantly going forward. The intent of this blog post…

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Jun 15, 2017

Rieger Report: Munis – “The Kids are Alright”

As we approach the mid-year point of 2017 the muni bond market has not been shaken by a heavy news cycle of downgrades, negative watches and ever present Illinois and Puerto Rico downbeat press.  Technical factors play a big role in overcoming this pressure but there are other compelling rationale in support of munis in the…

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Jun 13, 2017

Rieger Report: Muni Market’s Moot Reaction to Bond Insurers Credit Watch Negative

So far, the municipal bond market has seen only a modest reaction to the recent negative credit watch being placed on the ratings of several bond insurers. Month to date as of June 12, 2017, the S&P Municipal Bond Insured Index tracking over $148billion in par value of insured bonds has performed in sync with the overall…

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Jun 8, 2017

Rieger Report: Corporate Junk Bonds – “Danger, Will Robinson!”

The bond markets are certainly not “Lost in Space”1. There is good rationale as to why the bond markets are in the position they are today; compressed spreads are the result of low rates coupled with strong demand out pacing supply for yield assets.   However, the homogenization of the US corporate bond markets is worrisome and should…

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Jun 6, 2017

Rieger Report: Illinois G.O.s on the Edge

The recent ratings downgrades by both Moody’s and S&P Global Ratings have placed the State of Illinois general obligation bonds on the edge of becoming junk.  As of this writing, the ratings are Baa3/BBB-/BBB by Moody’s, S&P and Fitch. The fiscal struggle endured by Illinois has indeed been a long one, now yields for Illinois G.O.s have…

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Jun 4, 2017

Rieger Report: Infrastructure Bonds

With the President’s focus on the U.S. infrastructure this coming week it is a good time to look at the existing infrastructure bond markets.  Municipal bonds have long played a critical funding role in the U.S. infrastructure sector. The 19,000 tax-exempt municipal bonds tracked in the S&P  Municipal Bond Infrastructure Index mainly consist of investment grade bonds…

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May 24, 2017

Rieger Report: The World is Flat

There have been a myriad of articles with headlines and content about rising rates, the coming evisceration and other zombie apocalypse events in the bond markets.   There can be no doubt that yields for fixed income asset classes are low and there is also no doubt that rates will eventually be higher.  How, when and…

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Mar 27, 2017

Rieger Report: Why foreign investors like U.S. municipal bonds

A trend that has been catching attention is purchases of U.S. municipal bonds by foreign investors.  A terrific summary was recently published by VanEck’s Michael Cohick and that can be found by clicking here. As that research points out, the Federal Reserve data on foreign investor holdings has jumped to end 2016 at $106 billion.  That…

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Feb 13, 2017

Rieger Report: The Uncorrelated

Why worry?  New highs for the U.S. stock market indices will keep coming, right?  Just in case, this might be a good time to examine asset classes that are not correlated to the equity market or the “uncorrelated”. Corporate bonds of the issuers in the S&P 500 are tracked in the S&P 500 Bond Index.  As a group…

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