Market News Commentary - From The Desk of David Loesch 10.04.2018Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on October 4th, 2018
• Overall street chatter is “how high will yields go?”. With the employment numbers on 10/03/2018 pushing the yield up, you will have ADP numbers again on 10/04/2018 that might move our markets even more. With increased yields comes increased market (equity) pressures.
• NY will be issuing 7b of bonds in the 4th Q of 2018. December is shaping up to be a large issuance month, and I do not think we will see a year like 2017 December.
• Miami is pushing Amazon to pick that city as their site. Billions of dollars have been spent thus far improving the infrastructure of the city along with the airport. It will be interesting to see where they choose.
• Powell indicates that “there is a long way to go before normalization” this will be interesting to see if he walks back on his comments over the next 5 days.
• If you have traveled anywhere in the world away from the US, you know that High-speed rail is a “staple” of the transportation system of other countries. There is a debate now in Congress about installing HS Rail in the United States, of course, this has been going on since 1975 and started by a MUNI bond layer named Kenneth Bond. Many argue that the US should make transportation a “right” not a “stretch” to get on a plane or a train. What this means in practice is that transportation needs to be a national mandate to improve all public transit, these improvements are being considered in Congress through MUNI bonds. I find it interesting that this debate has been going on for decades, the MUNI bond market would absorb these issues and it would be better for all including the taxpayers as they would be revenue bonds.
• Pacific Investment Management Company (PIMCO) will buy Gurtin MUNI Bond Management company who oversees 12B in MUNI assets for High Net Worth individuals. Terms of this acquisition were not disclosed; however, the going rate for a MUNI bond shop is 5.50-7.50X to revenues.
• PA Treasurer Joe Torsella indicated that the state is shifting monies out of the equity markets into Fixed income as they (and other states) believe that the bull run in equities is about to come to a close.
It would be my pleasure to speak to you directly about the current markets and how The DRL Group can be of service to your fixed income investment portfolio. To schedule a time to talk, please email me at email@example.com.
This content is based on the opinions of David Loesch based on his review of articles from Bloomberg.com or CNBC.com.
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