{"id":942,"date":"2020-09-25T10:30:00","date_gmt":"2020-09-25T14:30:00","guid":{"rendered":"https:\/\/buymuni.com\/?p=942"},"modified":"2020-09-27T22:10:38","modified_gmt":"2020-09-28T02:10:38","slug":"morgan-stanley-u-turns-no-longer-thinks-federal-stimulus-will-come-in-2020-bumpy-path-for-munis-over-short-term","status":"publish","type":"post","link":"https:\/\/buymuni.com\/?p=942","title":{"rendered":"Morgan Stanley U-Turns: No Longer Thinks Federal Stimulus Will Come in 2020. &#8220;Bumpy Path&#8221; for Munis Over Short-Term."},"content":{"rendered":"\n<p>September 25, 2020 &#8211; In a reversal from its <a rel=\"noreferrer noopener\" href=\"https:\/\/buymuni.com\/?p=883\" target=\"_blank\">July prediction<\/a>, Morgan Stanley&#8217;s municipal research team now thinks federal stimulus will not be forthcoming in 2020, introducing down-side risk to municipal bonds.<\/p>\n\n\n\n<p>The report said: <em>Without further fiscal support, the broader macro outlook becomes murkier, introducing the possibility of near-term disappointment in economic data and rates volatility, historically a muni demand dampener.<\/em><\/p>\n\n\n\n<p>In addition, negative headlines and potential rating downgrades may exert additional pressure on the asset class, increase volatility through interactions with Treasuries and other fixed income instruments, and ultimately, weaken investor demand.<\/p>\n\n\n\n<p>The analysts noted that a stimulus bill is still possible, just no longer in the &#8220;base case&#8221; assumption. Nothing that Congress was still attempting to pass a stimulus bill, Morgan Stanley said &#8220;<em>strong incentives remain to at least keep the door open to a deal in order to help incumbents from both parties p for re-election.<\/em>&#8220;<\/p>\n\n\n\n<p>The upcoming elections could provide municipal bonds its next catalyst, with a Democratic wave likely to trigger a fiscal expansion, steepen the yield curve but also increase the after-tax value of municipal bonds. <\/p>\n\n\n\n<p>The bank recommends investors favor sectors that are positioned to fare well without Federal stimulus (airports, higher ed) and underweight state and local government credit.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p>Contact Lucia Diaz at LDiaz@buymuni.com.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>September 25, 2020 &#8211; In a reversal from its July prediction, Morgan Stanley&#8217;s municipal research team now thinks federal stimulus&#8230;<\/p>\n","protected":false},"author":17,"featured_media":718,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[8,13,11],"tags":[],"class_list":["post-942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","category-markets","category-sell-side-research","wpcat-8-id","wpcat-13-id","wpcat-11-id"],"jetpack_featured_media_url":"https:\/\/buymuni.com\/wp-content\/uploads\/2020\/01\/BM-Logo-MorganStanely.jpg","jetpack_sharing_enabled":true,"jetpack_likes_enabled":false,"_links":{"self":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts\/942","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=942"}],"version-history":[{"count":1,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts\/942\/revisions"}],"predecessor-version":[{"id":943,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts\/942\/revisions\/943"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/media\/718"}],"wp:attachment":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}