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After surging over the first few trading days following the election due to the perceived risk of higher taxes, the municipal bond ETF (NYSEARCA:MUB) saw a sharp intraday reversal of more than 1% (big for a bond ETF) today. Investors had been flocking to tax exempt munis since taxes are now expected to go up across the board, so it's surprising to see the sharp reversal on a day in which the president held a press conference sharpening his stance on the tax issue. Are investors all of a sudden expecting the tax hit to not be as bad, or are they simply selling any liquid assets they can find to raise cash? Perhaps there is a fear on the part of investors that any possible deal will include a combination of higher rates and limits on deductions.

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Source: Municipal Bonds See Sharp Reversal