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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: bobby beara who wrote (36237)	12/29/1999 10:21:00 PM
From: Berney	Respond to of 99985

bb, I could easily do it as of 11/30, but I don't have the historical data for comparison. Berney

To: bobby beara who wrote (36237)	12/29/1999 10:58:00 PM
From: Les H	Respond to of 99985

Nuveen Fixed-Income Head Sees Strong Muni Bond Rally in Early 2000 As Y2K Cash Returns and After-Tax Yields Drive Investor Appetite 11:46 a.m. Dec 29, 1999 Eastern CHICAGO, Dec. 29 /PRNewswire/ -- Municipal bond prices are likely to rally strongly in the first part of 2000 as investors put back to work extra cash they are holding as a precaution against potential Y2K disruptions, according to the head of Nuveen Investment Management. This projected cash inflow will accentuate the typical January effect in municipal bonds caused when bondholders re-invest their coupon payments or the proceeds from called bonds and maturing bonds. "The year-end rally in municipal bonds is very real, and this year the rally will be stronger than usual," said Ted Neild, Managing Director and head of fixed income investment strategy at Nuveen Investment Management, which manages more than $40 billion in its exchange-traded funds, mutual funds and individual accounts. Yields on municipal bonds are very high relative to Treasuries and other taxable investments. One example of the attractive opportunities in the market are Nuveen ETFs, which currently offer taxable equivalent yields in excess of 12% for funds with average credit ratings as high as "AA". This is equivalent to junk bond yields on the taxable side. "The market is still getting accustomed to the new relationship between municipal bonds and Treasuries," Neild said. Municipal bonds had typically traded around 87% of the yield on long Treasury bonds. Now that relationship is adjusting to where munis should pay about 90% to 92% of the long-term Treasury rate given the lower issuance of the federal government and the reduced supply of "on-the-run" Treasury bonds, Neild noted. "With the prevailing yield ratio at 96% of Treasuries, municipal bond are attractive and the values are here today. Prices will need to rise to restore the long-term balance," he added. In addition to reduced federal borrowing, benchmark Treasury rates should be held in check by rising productivity and low, stable inflation rates. Notwithstanding strong domestic growth, the annual inflation rate at the consumer price level will remain next year in the mid-low 2% range Neild said. This low inflation level should result from several factors, including persistent productivity gains in the economy, as investments in technology help make work more efficient and restrain unit costs. About Nuveen The John Nuveen Company (NYSE: JNC), through its John Nuveen & Co. Incorporated and Rittenhouse Financial Services subsidiaries, provides customized individual and institutional managed accounts, mutual funds, exchange-traded (closed-end) funds, and defined portfolios to help financial advisers serve their clients. Including defined portfolios, the Company manages or oversees $70 billion in assets. The John Nuveen Company is listed on The New York Stock Exchange and trades under the symbol "JNC." SOURCE The John Nuveen Company