Asset TV: Municipal Credit Observations - August 2020

Nate Harris, Senior Vice President and Co-Director of Municipal Research, discusses municipal credit quality, including where risks and value may lie. This topical conversation covers municipal budget conditions, revenue trends, Federal support initiatives, and Appleton’s proprietary stress testing.

Review and

October 2020

“We would not view failure of Congress to pass an additional round of federal aid for state and local governments this fall as a “credit cliff”…”

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September 2020

“With revenues down across nearly all sectors, rating agencies have taken notice, with Q2 ’20 downgrades – 81 by Moody’s and 207 by S&P – far outpacing upgrades…We expect a weaker ratings trend to continue over the next couple of quarters, although primarily in sectors such as transportation, higher education and healthcare…”

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August 2020

“As we write, Congressional negotiations on a second stimulus deal continue, after the House passed a $3T package in May and the Senate unveiled a $1T counterproposal…”

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July 2020

“Consumption-based revenue has held up better than income tax revenue…considerable value can be found in select Sales Tax-backed bonds supported by diverse and broad tax bases…”

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Coronavirus and
the Markets


Corporate Credit Observations – August 2020

“We believe that despite today’s absolute level of rates, the corporate bond market still offers compelling relative value.  Despite record-breaking summer issuance, spreads continue to grind tighter as investor demand remains high…”

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Municipal Credit Observations – August 2020

“In May we wrote about municipal credit quality and how Appleton was seeking to separate risk from opportunity.  Our stance remains the same – a diligent research process is key and we believe our longstanding preference for high quality and well-established issuers will serve well in the current environment…”

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Higher Education Bond Issues

“We recently evaluated and ranked all Appleton approved higher education issuers based on demand profile and financial strength.  Doing so helps us project how well they are likely to stand up to prolonged adverse conditions.”

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Municipal Credit Observations

“At Appleton, we have always managed high quality portfolios comprised of what we feel are credit resilient municipal entities.  We look for municipal and service essentiality, size and breadth, and revenue diversification. . . we expect all your holdings to remain creditworthy.”

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Economic and
Market Commentary


Operating in a Low Yield Environment

“Riding a multi-decade fixed income bull market, municipal bond yields have fallen to levels not seen since the Eisenhower presidency.  For those not well versed in American political history, that would be the 1950s, a time period that predates the professional experience of nearly all of today’s financial advisors…”

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Differentiating Credit Vigilance From Complacency

“All too often favorable capital market conditions have generated a degree of investor and analyst complacency.  With municipal credit spreads at near record lows, the margin for safety has been diminished…”

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Opportunity Zones: A Look at Potentially Winning Models

“Opportunity Zones are fast becoming a real estate development buzzword, as powerful tax incentives unleashed by the 2017 Tax Cuts and Jobs Act sparks a proliferation of private capital investment into economically stressed census tracts…”

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Opportunity Zones:
An Impetus for Municipal Credit Enhancement

“As capital flows into Opportunity Zones, we are actively looking for localities with the best prospects … Weeding through Opportunity Zone tracts early in their evolution offers our research team an ability to identify municipal issuers with overlooked future credit prospects…”

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Q3 2020

What’s in Your Index?

“We feel your primary benchmark should be your financial plan and that’s what we manage towards…while we often speak about “the market”, what matters most is how your portfolio works for you…”

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Q2 2020

An Age of No Limits

“On April 9th, Federal Reserve Chairman Jerome Powell declared that the U.S. central bank was committed to “forcefully, pro-actively, and aggressively” helping the country recover, and that there were “no limits” to the money the Fed could deploy…The eventual implications of these prescriptions remain unknown…”

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Q1 2020

What Investors Can Learn from CEOs, Army Rangers, Pilots and Police

“Stress impacts the brain’s cognitive and emotional intelligence, critical abilities needed to make sound decisions.  Understanding how this occurs can be highly applicable to individual investors…”

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Q4 2019

Forecasting in an Uncertain World

“As we close the door on the 2010s and enter the 2020s, thinking about the risks we know, don’t know, and don’t know we don’t know can help frame market expectations…”

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Video Briefs

August 2020

Asset TV: Municipal Credit Observations – August 2020

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May 2020

Asset TV: 2020 Municipal Market Strategy – Opportunities and Considerations

Watch Video

February 2020

Asset TV: 2020 Municipal Strategies and Considerations

Watch Video

July 2019

Benefits of a Municipal Crossover Strategy

Watch Video