Treasury Curve Flattening Continues, Omicron Concerns Surface, Volatility Returns

Stable Short Rates, Falling Long-Term Yields Leads to Flatter Curve, The Infrastructure Bill (IIJA) Passes Includes $550B of New Spending

Expectations for Fed Policy Shift, Treasury Curve Flattens, Planned Fiscal Programs Downsized, Credit Wider, Mortgages Tighter in October; Both Tighter YTD, Agg Returns Modestly Negative in October; YTD Remains Negative

Municipal Yields Rise, Muni Provisions Out of “Build Back Better” Plan, Weakest Cities/States Show Fiscal Improvement; Puerto Rico Prepares to Exit Bankruptcy, Upward Rate Movements Push October Returns Negative

The Baird Mid Cap Growth portfolios rose 4.7% in the third quarter, gross of fees, despite a slowing economic recovery and trouble in the global supply chain. The Russell MidCap® Growth Index, declined.

The Baird Small/Mid Cap Growth strategy gained 1.4% in the third quarter, gross of fees, defeating headwinds, like problems in the global supply chain, that drove the Russell 2500 Growth Index to a loss of 3.5%.

As the market moves from low-quality to high-quality stocks, the Baird Value strategies relied on security selection to outpace its benchmarks.

Yield Curve Flattens as Yields Rise, Potential Turmoil at the Fed, Increased Volatility Impacts Economic Recovery, Spreads Mostly Widen During Q3; Tighter YTD, Market Returns Negative in Sept; Mixed QTD and YTD

Municipal Yields Rise and Curve Steepens in Q3, Key Municipal Revisions Included in Biden’s Infrastructure Draft, Shorter and Lower-Quality Led Performance in Q3

Global markets were mixed this quarter; Chautauqua’s funds were well positioned and outperformed their benchmarks.

Yields Rise Modestly as Fed Confirms Tapering Likely to Begin in 2021; Spreads Relatively Unchanged in August; Market Returns Generally Negative in August, Mixed YTD

Municipal Yields Rise and Curve Steepens, Municipal Credit Ratings Improving Despite Evident Natural Disaster Risks, Lower-Quality Outperformance Stalls and Long-Term Maturities Lag.

Yield continue to fall and curve flattens as Fed signals status quo; Delta variant increases COVID-19 cases.

Trend of lower rates and flatter curve continues in July.

With supply chains struggling to meet demand, growth stocks continued their volatile ride higher. Increased business and consumer spending helped fuel a strong quarter.

With supply chains struggling to meet demand, growth stocks continued their volatile ride higher. For the strategy, healthcare stocks continued to lead our outperformance.

As we move from economic recovery to expansion, high-quality stocks continue to hold their own. But a handful of so-called “meme” stocks continue to confound the benchmark.

Nearly all sectors and regions performed strongly in the second quarter, with the U.S. continuing to lead relative to international developed and emerging markets.

Curve flattens on both record demand and supply, fiscal support and record tax revenues lead an impressive recovery for municipal credit.

Yield curve flattens as Fed signals tapering and liftoff may begin earlier than previously anticipated.

Rates decline modestly despite inflation concerns; demand outpaces supply as economy reopening continues, spreads tighter across most market segments in May and sector returns mostly positive, but mixed YTD.

Light supply and positive demand support prices, infrastructure negotiations continue, state/local aid distributions begin to enhance recovery and lower quality municipals continue their trend of outperformance.

Baird Advisors provides timely insights about the current interest rate environment for the baby boom generation.

Municipal curve flattens as demand overwhelms even rising levels of supply, municipal investors digest tax and infrastructure plan implications and longer maturities and lower-quality outperformed in April.

Rates decline and curve flattens as Fed maintains extremely accommodative policies, spreads tighter across most market segments in April and sector returns positive for April, but mixed YTD.

Robinhood trading and short squeezes commanded headlines early in the quarter, but progress on the vaccine front, a lower turn in Covid-19 cases, and the passage of a very large fiscal stimulus bill also impacted markets.

The coronavirus vaccine rollout began worldwide giving line of sight to the economic reopening and recovery.

Consistent with past economic and market cycles, low quality/high beta stocks led out of the bear market of 2020.

Rates rise quickly as fiscal stimulus and vaccine rollout lead to higher growth and inflation expectations.

Municipal curve steepens on growth/inflation concerns, ARPA, AJP, AFP and taxes and solid March returns provide mixed returns for the quarter.

Municipals yield rise on inflation concerns, winter storm Uri cripples Texas at great economic impact and rising rates produce negative February returns.

Longer yields rise as curve steepens, COVID-19 cases plateau, House passes pandemic relief package.

Curve steepens modestly, Biden sworn in as U.S. President, vaccination efforts continue, spreads mixed across market segments in January and sector returns mixed though indices generally negative.

Strong rally in lower-rated municipals, Democrats take control in Washington DC, and vaccinations and reopening become visible.

Historically, deep value/low quality stocks have led out of bear markets.

The storyline remained the same for much of 2020’s final three months – difficult trends in COVID-19 cases and deaths, a heated political environment, and an accommodative fiscal and monetary backdrop.

Stimulus measures throughout the year have helped valuation multiples grow richer, despite a collapse in corporate earnings and economic fundamentals.