Advanced Search

Recent Commentary

MMA Muni Outlook January 2011

Market Summary

Losses Continued, Creating Value for Investors

The municipal market posted losses for another month. The MMA municipal price index fell -2.3%. However, through Janu-ary 18, the market’s price decline was -3.6%, so that in the last 9 sessions of the month, 36% of the month’s losses were re-claimed. Investors began to take notice of the 8% taxable equivalent yield available in 30-years as AAA tax-exempt yield rose above 5%. In addition, the MMA index edged into positive territory. Unfortunately, since Labor Day 2010, the municipal market hasbeen unable to sustain a positive price trend. The downward price pressure has correctly been attributed to the sizeable redemptions from the mutual bond funds over the past 3 1/2 months, in excess of $25B.

MMA Muni Outlook January 2011