Municipal Fixed Income Investment Strategy, July 2024
July 17, 2024 — Sage provides an outlook for the municipal market in the second half of 2024, including our sector views and positioning and the key themes we are following.
Market Outlook
- Municipals held up well in the second quarter versus comparable Treasuries, which has kept municipal/Treasury ratios on the richer side, and credit risk was well contained for most issuers.
- Strong summer seasonals helped to drive both yields and spreads lower during June, which pushed year-to-date returns for the broad municipal market index back to a more palatable -0.40%. The municipal curve environment also began to normalize.
- Despite some challenges we see for the second half, municipal issuers are expected to remain financially stable, and the market outlook remains cautiously optimistic.
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