The Woo Group RBC Wealth Management Hong Kong USA - Turbulence Ahead?

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The Woo Group RBC Wealth Management Hong Kong USA

• Monthly Overview Turbulence Ahead?

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• A late-month rally allowed munis to post positive
  performance numbers in June, returning 0.09. For
  2014, performance has been an impressive 6.00.
  However, recent monthly returns have been on a
  declining trend, and we think munis will likely
  struggle to duplicate the strong H1 2014
  performance. Coincidentally, this slowdown in
  performance comes as the Federal Reserve enters a
  period where it could be considering how to best
  communicate its monetary policy exit strategy
  without invoking a repeat of the 2013 taper
  tantrum. The Federal Reserve, at its most recent
  meeting, repeated that current accommodative
  monetary policy will remain in place for a
  considerable period as the economy slowly
  recovers. That being said, with recent stronger
  employment and inflation readings, the
  more-hawkish members of the Federal Reserve Board
  are growing restless, analysts are grinding their
  teeth over the Federal Reserve falling behind the
  (inflation) curve, and even Fed Chair Janet
  Yellen warned against becoming complacent because
  rates wont stay low forever. We still believe
  interest rate normalization will take years and
  will be an uneven process. However, as the Fed
  refines its messaging plan, markets could
  experience some turbulence. We recommend
  investors take advantage of these periods of
  volatility to add bonds to their portfolios at
  cheaper prices.

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• In this issue of Municipal Market Insight
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• Muni pillars of support have recently shown signs
  of stress. We offer our thoughts, or concerns, on
  what we see as some cracks beginning to form in
  some of the factors which have been supporting
  the muni market in recent months.
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• Pension funding shortfalls roil the muni markets
  and scare investors. We address the Pension
  Funding Conundrum and provide clarity and our
  perspective.
• Has anyone heard there is an election this fall?
  We provide our thoughts on the recent defeat of
  former House Majority Leader Eric Cantor and the
  possible implications for the muni market.

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• Our monthly Commonwealth of Puerto Rico Update
  covers the governments Public Corporation Debt
  Enforcement and Recovery Act, which is designed
  to allow certain government-related corporations
  to renegotiate terms of outstanding debt. We also
  discuss the governments rapid response to budget
  shortfalls.
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• Insurance Commentary reviews a motion filed by
  several insurers to delay Detroits bankruptcy
  trial.
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• Municipal Market Headline Events provides clarity
  on recent news items covering Detroit and the
  State of Michigan, the State of New Jersey, New
  York State and the City of New York Metropolitan
  Transit Authority, San Bernardino, CA, and the
  Virgin Islands.
• See this here