Loading...
HomeMy WebLinkAboutCouncil Presentation 02/16/2021- Marana Market UpdateTown of Marana Market Update PFM Asset Management LLC 1820 East Ray Road Chandler, AZ 85225 (855)885-9621 pfm.com For the Quarter Ended December 31, 2020 Presented By: Luke Schneider, CFA, Director Annette Gaston, Senior Managing Consultant TOWN OF MARANA For the Quarter Ended December 31, 2020 Market Update Short Rates Were Steady, but the Yield Curve Steepened in Fourth Quarter PFM Asset Management LLC Source: Bloomberg as of 12/31/2020. 0.16% 0% 1% 2% 3% 4% 5% Dec-14 Dec-16 Dec-18 Dec-20 3-Year Treasury Yield 0.06% 0.36% 0.91% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3 M 1 Y 2 Y 3 Y 4 Y 5 Y 10 Y Maturity U.S. Treasury Yield Curve December 31, 2019 September 30, 2020 December 31, 2020 TOWN OF MARANA For the Quarter Ended December 31, 2020 Market Update Credit Sector Continues Strong Outperformance in the Fourth Quarter PFM AssetManagement LLC Source: ICE BofAML Indices. Sector performance as of 12/31/2020. This is not specific to Town of Marana’s portfolio performance. 1-3 Year Indices 0.05% 0.13% 0.46% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1%U.S. TreasuryAgencyCorp A-AAAFourth Quarter 2020 3.10% 2.67% 3.98% 0% 1% 2% 3% 4% 5%U.S. TreasuryAgencyCorp A-AAAFull Year 2020 TOWN OF MARANA For the Quarter Ended December 31, 2020 Market Update Yield Environment as of December 31, 2020 PFM AssetManagement LLC Source: Bloomberg BVAL yield curves for Treasury, Agency, and Corporate. 3-month corporate yields from commercial paper; A-1+ for AA and A-1 for A. Yields are for indicative purposes only; actual yields may vary by issue. Note that PFM Asset Management LLC is not responsible for management of funds invested in external money market funds and LGIPs. *AZ LGIP Pool 5 & Pool & 7 Yields. Source: Office of the Arizona State Treasurer as of December 31, 2020. The yields for Pools 5 and 7 are included in the 3-month range because they can be accessed within one day. Maturity Treasury Federal Agency AA Corporate AZ LGIP Pool 5* AZ LGIP Pool 7* 3-Month 0.06%0.05%0.18%0.11%0.05% 1-Year 0.10%0.10%0.20%-- 2-Year 0.12%0.12%0.25%-- 3-Year 0.16%0.22%0.33%-- 5-Year 0.36%0.47%0.64%-- TOWN OF MARANA For the Quarter Ended December 31, 2020 Market Update FOMC Interest Rate Projections –December 2020 PFM AssetManagement LLC Source: Federal Reserve and Bloomberg. Individual dots represent each Fed members’ judgement of the midpoint of the appropriate target range for the federal funds rate at each year-end. Fed funds futures as of 12/16/20. 0% 1% 2% 3% 4% Fed Participants’ Assessments of “Appropriate” Monetary Policy Dec-20 FOMC Projections Dec-20 Median Fed Funds Futures 2020 2021 Longer Term20222023 Source: Federal Reserve, economic projections as of December 2020. -2.4% 4.2%3.2%2.4%1.8% -4% 0% 4% 8% 2020 2021 2022 2023 Longer Run Change in Real GDP 6.7% 5.0%4.2%3.7%4.1% 0% 2% 4% 6% 8% 2020 2021 2022 2023 Longer Run Unemployment Rate 1.2% 1.8%1.9%2.0%2.0% 0% 1% 2% 3% 2020 2021 2022 2023 Longer Run PCE Inflation 0.1%0.1%0.1%0.1% 2.5% 0% 1% 2% 3% 2020 2021 2022 2023 Longer Run Federal Funds Rate Fed’s Updated December Projections TOWN OF MARANA For the Quarter Ended December 31, 2020 Market Update PFM AssetManagement LLC © PFM Disclosures This material is based on information obtained from sources generally believed to be reliable and available to the public;however,PFM Asset Management LLC cannot guarantee its accuracy, completeness, or suitability.This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation.All statements as to what will or may happen under certain circumstances are based on assumptions,some but not all of which are noted in the presentation.Assumptions may or may not be proven correct as actual events occur, and results may depend onevents outside of your or our control .Changes in assumptions may have a material effect on results .Past performance does not necessarily reflect and is not a guaranty of future results .The information contained in this presentation is not an offer to purchase or sell any securities .