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Moody's upgrades outlook on U.S. states

  • Moody's has lifted its collective outlook on U.S. states to stable from negative, the first time the ratings agency has improved its view of states since the financial crisis.
  • "Improving labor and housing markets have boosted consumer confidence, and strong stock-market performance has further improved state revenues," Moody's analyst Baye Larsen explained.
  • Credit quality is high, with 30 states holding the two highest ratings, AAA or or Aa1. Due to its massive pension gap, Illinois has the lowest rating among states, A3.
  • The local government outlook remains negative. (PR)
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Comments (3)
  • This summary begs the question of why the state outlook improved but the cities' outlook has remained negative. Moody's apparently cites the improved housing market as a primary factor, yet property taxes in general go to localities, not to the states.
    21 Aug 2013, 05:14 AM Reply Like
  • And yes, there is often a delay before rising property values are reflected in tax assessments, but you would think generally rising house prices would still be reflected in the cities' "Outlook."
    21 Aug 2013, 05:29 AM Reply Like
  • I've been holding both muni ETFS (muni, HYD) and some municipal mutual funds and Iam down 8%.
    It's my first time investing in municipal bonds/funds and Iam so worrying!!, do you advise me to hold tight or sell?
    Iam willing to wait up tp three years.
    I look forward to hear back from you!!
    3 Sep 2013, 08:53 PM Reply Like
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