Insights

CREDIT AND MARKET STRATEGY
MUNICIPAL MARKET WEEKLY

February 24, 2020

Global Markets: Equities sell off and bond yields fall to record lows on Coronavirus fears.

Coronavirus (CORVID-19) fear created a safe haven scramble on  Friday, sending the 30yr Treasury yield to a record low of 1.84%, following several days of risk on reflecting better than expected economic news. Friday’s catalyst was the Markit Flash Composite PMI, which indicated the first contraction in manufacturing and business services since 2013. Equities ended the week down with the Dow returning -1.4% to 28,922; the S&P 500 down -1.3% to 3,376; and NASDAQ down -1.6% to 9,576. Last week’s equity losses carried over through today following reports that CORVID-19 has spread to 30 countries and warnings by  corporations in numerous industries of potential disruptions to supply chains, sales, and earnings beyond 1Q20...

This week: Politics and CORVID-19 should dominate headlines. Wall-to-wall coverage of CORVID-19 on the heels of Milan, Italy being in lock-down on new cases. Headline data for the week is Thurs when BEA releases 4Q19 GDP. Expectations are for a 2.1% q/q result. We also have consumer confidence, residential home sales, durable goods, ISM PMI. Trump vs CORVID-19...

Quarterly Review

SAMUEL A. RAMIREZ & COMPANY, INC.
QUARTERLY MACROECONOMIC OUTLOOK
FINANCIAL STRATEGIES GROUP – 1st QUARTER 2020

Dear Clients,

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:

• The US economy enters its 11th year of expansion, and will likely grow at a pace moderately above potential (1.75%-2%).  The labor market stays robust as unemployment falls to 50-year lows
• Business investment remains downbeat, restrained by weak growth abroad and trade conflicts.  However, a “Phase 1” agreement between the US and China is at hand, and consumer spending is robust.
• The 10Y Treasury yield approaches historical lows, and Moody’s Baa Index yield slides to levels not seen for over 60 years.
• US equity markets reach new highs.  Money markets are rattled, prompting the Fed to intervene through repo operations.  The Fed’s balance sheet expands in the last quarter by $400bn.

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.