Alert May 14, 2009

Bond Market Indicators

The yield on AAA-rated municipal bonds dropped during the last 30 days from 4.91% to 4.71% on 30-year bonds and from 3.45% to 3.21% on 10-year bonds, while the yield on Treasuries rose from 3.68% to 4.08% on 30-year bonds and from 2.86% to 3.19% on 10-year notes, bringing the municipal-treasury yield ratio for 10-year maturities close to 100%.

Source:
Bloomberg (www.bloomberg.com)

Most indicators relevant to the bond market worsened in March 2009. However, certain positive economic signs in April, including an increase in pending home sales and construction spending, prompted Federal Reserve Chairman Ben Bernanke recently to suggest that recovery may begin as early as the end of 2009. Here are the official numbers:

Sources:
Unemployment Rate and Consumer Price Index: U.S. Bureau of Labor Statistics (www.bls.gov)
Existing Home Sales, New Homes Sales, and Housing Starts: National Association of Realtors (www.realtor.org)