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Rising rates can spook bond investors, since rates and bond values are inversely related. As a result, investors sometimes sell following a sharp price decline, hoping to reinvest as the market recovers, effectively “selling low.”

Unlike corporations, municipalities are perpetual entities that cannot be liquidated through bankruptcy. Thus, Chapter 9 of the Bankruptcy Code is dedicated to the unique circumstances of municipalities. This report explains the key components of Chapter 9, identifies entities eligible to file, reviews state actions to deter future filings by local municipalities and discusses recent municipal bankruptcy filings. Analysis of the last three periods of municipal market volatility suggests that investors that stay the course may benefit from their patience.

In prior rising rate environments, various parts of the municipal yield curve reacted differently based on economic conditions and the pace and scale of Fed activity. An analysis of historical changes in monetary policy shows that in the past three rising rate environments, a hypothetical investor who stayed the course through the tightening cycle –regardless of their position on the yield curve – may have experienced positive total returns, the notion that “rising rates are bad for bond investors” notwithstanding.

The process to execute and close deals continues to challenge investors flush with cash. The trend in deal volume over the last several quarters brings this to light. Nevertheless, the M&A community continues to churn with activity as buyers and sellers try to create mutually beneficial outcomes. Whether you are a buyer or seller, the featured ideas will provide you with guidance on how to better execute your next deal.

Despite continued geopolitical instability and the media’s newfound focus on jihadist terror, equities rallied during the month on optimism that monetary policies among major central banks will continue to be quite supportive. U.S. corporate earnings for the second quarter of 2014 also came in stronger than expected, with the S&P 500 earnings growth rate accelerating to over 8% year-on-year. Developments outside the U.S. were less encouraging.

The fixed income environment is changing, and as a result we believe opportunistic fixed income strategies with the flexibility to go anywhere are better suited to today’s market realities than traditional, duration-heavy core holdings. But because these strategies come in different shapes and sizes, we think it is important for investors to drill down into what they’re actually investing in and understand both the what, and the how of investing in this new fixed income landscape.

The tightening of regulations around the world is prompting banks to offload a variety of financial assets onto the capital markets. Investors are aware of this opportunity. However, we think that many hold misconceptions about it because of the opaque nature of the disintermediation process, and the unfamiliar and heterogeneous nature of the assets involved. In particular, we believe that investors incorrectly assume the opportunity has been missed and offer evidence that this is not the case.

While subdued inflation and low bond yields have been key common features across major economies in the current growth recovery, the divergence in labour market dynamics has been striking. Whereas the rise in Euro area unemployment has barely been dented, the fall in US or UK unemployment has been faster than anticipated.

Our Convergence thought leadership focuses on transformative technologies in the early 21st century. Insights and data shared demonstrate the significant impact these integrated technologies will have on virtually all industries and people worldwide for years to come.