Munis Maybe the Play for Bond Investors
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Welcome to the Schwab Market Update podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Keith Lansford, and here is Schwab's early look at the markets for Tuesday, March 25th.

Stock investors will hope to build on Monday's surge that was prompted by the reports that President Trump may tone down his April 2nd Liberation Day round of tariffs by trying to be more targeted towards the countries that have an unfavorable trade imbalance with the U.S.,

Stocks were also helped by the March S&P Global Composite PMI that was reported after Monday's open with the 53.5 print, which is above February's 51.6, suggesting that the economic expansion is speeding up. Much of the growth was driven by the services side, with the S&P Global Services PMI at 54.3 for March, which was higher than the consensus estimate of 50.8 and the previous month at 51%.

Manufacturing appears to be contracting because the S&P Global Manufacturing PMI for March was 49.8 below the 50 threshold. Bonds sold off this morning due to the better-than-expected S&P Global PMI report. This is additional evidence of the divergence between the soft and hard data. The hard data continues to perform well, but soft data is weak, said Cooper Howard, director of fixed income strategy for the Schwab Center for Financial Research.

Howard also noted, now presents an attractive entry point for munis. Returns will be influenced by the direction of treasury rates, but relative yields are near the highest they've been in a year and present an attractive entry point for investors looking for tax-advantaged income.

The S&P 500 stock index rallied above its 200-day moving average on Monday. The rally was driven by mega cap stocks. Tesla led the big boys by jumping up 11.93%. Amazon and Home Depot both rose 3.59%, while Nvidia grew 3.15%.

The S&P 500 index surged 100.01 points or 1.76% to 5,767.57. The Dow Jones Industrial Average increased 597.97 points or 1.42% to 42,583.32. Finally, the Nasdaq Composite jumped 404.54 points or 2.27% to 18,188.59.

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