The long Memorial Day weekend is fast approaching, and with it the unofficial start of summer and a typically slower pace — for a few months — on Wall Street. This seasonality creates an opportune time to take stock of the markets in what has so far been an exciting 2016 — that is, if your definition of “exciting” is wild, sometimes inexplicable swings in asset prices.
The good news in the municipal bond market: There is strong investor demand, which is bidding up prices. Not only is the domestic desire for munis running hot, the presence of negative interest rates in developed Europe and Asia has escalated the amount of money flowing in from overseas banks, pension funds and other institutions.
While U.S. stocks managed to eke out a small positive in the first quarter of 2016, bottom-line growth for the same period is coming in negative. It’s the fourth-straight quarter of negative earnings growth for the Standard & Poor’s 500. The last losing streak this long came during the depths of the financial crisis/Great Recession.