Markets Stalling, Seeking "Gold Standard" of Data

Economic Sentiment - The University of Michigan Consumer Sentiment Survey reported a score of 49, indicating a decline in consumer confidence, particularly regarding the government shutdown, inflation, and job security [2][4] - There is a noted discrepancy between soft data, like consumer sentiment, and hard data, suggesting a continuing pattern of economic uncertainty [3][5] Treasury Yields - Treasury yields are expected to remain rangebound due to a lack of hard data, with the government shutdown preventing the release of key employment reports [5][6] - Global yields remain elevated, which is likely to influence capital flows and keep U.S. yields high [7] - The term premium, reflecting investor compensation for market uncertainty, is also expected to remain elevated, contributing to sustained higher long-term yields [8][9] Municipal Bonds - Recent months have shown positive returns in the municipal bond market, although they still lag behind corporate and treasury markets [10][11] - Municipal bonds are considered an attractive investment option for higher tax bracket investors, especially given their relative valuations compared to corporate bonds [11][12] - The yield on municipal bonds is appealing, with a tax rate of about 24% needed for corporate bond yields after taxes to match municipal yields, which is historically low [12][13]