May 3 - Janney Capital Market's Head of Fixed Income Research & Strategy, Alan Schankel, says healthcare and state and local government bonds will offer yield, but higher education bonds warrant caution.
Welcome to you land this weekend by -- shake -- managing director at Janney capital markets research and strategy it's nice to see you here again. Click here. Well foreign investors the challenges always trying to find yield. Safety and protection when you're looking that your fund what sectors. Are you fighting perhaps more interesting and others these days. -- -- stick with the basics I like to state and local sector I think it's coming back revenue usery can come back I think they've learned a lot of lessons from all the the trials they've been through and in the last five or six years post 2008. So it I like that that sector healthcare I think it's very divided but he has the bigger. Organizations I think -- really thriving and in coming years. And it that's it obamacare yes I mean that's a big part of it and they've learned to. That set up systems to adapt to that they have the IT systems in the capital to invest. The other in this -- organization's ethical garbage collection do you expect an increase in health care insurance. Yes I think I think there's there's it's becoming a merger and acquisition market and I certainly think to be some issues to support that. We'll talk a little bit more about the estate and state and local governments the moment but are there any sectors that you're not as time. I'm very cautious about higher education and I think they have a lot of challenges. Unlike health care for example there are fewer opportunities for mergers and acquisitions. This more operations -- are going to be challenged leaders probably cutbacks coming at the federal level programs and so on. The graduating students in the northeast part of the country there's fewer each year at least for the next eight or nine years so they're demand is diminishing over. What about in that university's funded by state. That I I -- like them better they have the price competition going for and certainly there there's the low cost option. And they've learned in in recent years to operate better with fewer state -- Now let's get back to a state and local governments because you just put out a report looking at state credit what did you find in terms of the overall help. And did you see various sectors that perhaps showed more strength than others. Well we we think the state sector is probably stronger than the local sector that revenues that the state level have been up every quarter for twelve quarters street. At the local level where they're more dependent on property taxes it is a little more problematic because there's still fighting -- property valuations and and reassessment and so one. But both sectors are -- here. And I think actually have a -- some states have a surplus site I don't think we can count it too -- in a lot of states have a significant surplus. But certainly state in general but are often or three years ago. But you still concerned a little bit about pension funding. Pension funding is concerned I think it's improving it's a long term problem there's been a lot of reforms enacted in the last couple years so I think it's going in the right direction. Next year is BS standards that are will world will change and I think that's going to be able harsher. On pension fund numbers. Woolsey put but I think this situation is -- force states that have a surplus startling to see that money now. I'd like to see it go to education I think that's an important investment for first date. To support -- they're dated twelfth. Organizations is closer their higher education state vote. Congress that you're looking at on the horizon even for some the sectors that your feeling pretty good about. While the economy's underlying risks and transportation sector airport for instance that whole rooms. Have been improving their their coming back from some tough times but if the economy forward it could certainly have an impact on them. All right -- check good to see you thanks so much. I'm Rhonda schaffler this -- writers.