Reinhart Fixed Income Week in Review by Madison Investments 6.25.2021


Personal Income and Spending

Personal income fell 2.0% in May while personal consumption was unchanged.

Our Take: While incomes fell as stimulus ended, they fell less than expected as compensation levels rose. On the consumption front, spending on services is increasing as the economy reopens while spending on goods abates, possibly in response to higher prices.

Durable Goods

Orders for durable goods rose 2.3% in May. April orders were revised higher, from -1.3% to -0.8%.

Our Take: Orders for durable goods remain strong. Durable goods shipments continue to lag orders, so strength in manufacturing should continue as businesses try to keep up with demand.

Municipals

Year-to-date short-term borrowing is down 45% compared to the same time period in 2020 according to Bloomberg. State and local governments have issued $11.4 billion of short-term notes so far this year. Last year, municipalities issued the largest amount of short-term debt issued since 2013 as borrowing increased during the pandemic.

Our Take: A decline in short-term borrowing was expected as municipalities continue to rebound from the pandemic. Many state and local governments have experienced increases in revenue collection and federal aid this year leading to less uncertainty surrounding their finances.

“Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC (“MAM”), and Madison Investment Advisors, LLC (“MIA”), which also includes the Madison Scottsdale office. MAM and MIA are registered as investment advisers with the U.S. Securities and Exchange Commission. Madison Funds are distributed by MFD Distributor, LLC. MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer and is a member firm of the Financial Industry Regulatory Authority. The home office for each firm listed above is 550 Science Drive, Madison, WI 53711. Madison’s toll-free number is 800-767-0300.

Any performance data shown represents past performance. Past performance is no guarantee of future results.

Non-deposit investment products are not federally insured, involve investment risk, may lose value and are not obligations of, or guaranteed by, any financial institution. Investment returns and principal value will fluctuate.

This website is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

“Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC (“MAM”), and Madison Investment Advisors, LLC (“MIA”), which also includes the Madison Scottsdale office. MAM and MIA are registered as investment advisers with the U.S. Securities and Exchange Commission. Madison Funds are distributed by MFD Distributor, LLC. MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer and is a member firm of the Financial Industry Regulatory Authority. The home office for each firm listed above is 550 Science Drive, Madison, WI 53711. Madison’s toll-free number is 800-767-0300.
Any performance data shown represents past performance. Past performance is no guarantee of future results.
Non-deposit investment products are not federally insured, involve investment risk, may lose value and are not obligations of, or guaranteed by, any financial institution. Investment returns and principal value will fluctuate.
This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.
Although the information in this report has been obtained from sources that the firm believes to be reliable, we do not guarantee its accuracy, and any such information may be incomplete or condensed. All opinions included in this report constitute the firm’s judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.