Market News Commentary - From The Desk of David Loesch 10.10.2019Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on October 10th, 2019
- Fund Flows are still strong, with investors adding 1.67B last week.
- The gap between yields on short-term and long-term securities flattened by 0.6bps in the past week to 83bps
- Institutional investors offered $2.3b for sale through bid-wanted lists in the past week, down 29% from $3.21b in the previous period, based on data compiled by Bloomberg
- Trading in the municipal market totaled $59.7b in the past week, down 1.5% from $60.6b in the previous period, according to the Municipal Securities Rulemaking Board
- U.S. state and local governments are set to sell more than $8.47b of bonds next week
- Trump will be meeting with the Chinese officials soon; this meeting has been on the books for a while. Officials indicated that they were increasingly reluctant to agree to a broad trade deal perused by Trump – this will create volatility in our markets.
- The Chicago teacher's union set a strike date of 10/17; this will impact the bonds from a volatility perspective. About a year ago, the LA teacher's union went on strike; it settled in about two weeks; the difference here is Chicago is already teetering on bankruptcy with their Board of Ed’s.
- AMT bonds are getting noticed by investors, 148B is this market, and they are still paying a premium as to Non-AMT paper. With Trump's overall tax plan in 2017 reducing the impact that AMT paper has on individuals, I would suspect that this market will continue to move up in price, however with a potential change in the White House in 2020, this might be short-lived. On average, AMT paper yields 35bbps more than Non-Amt.
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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