- Call us at 866-664-4040
- About Us
- Trading Philosophy
- Municipal Bond Offerings
- Municipal Bond News
- Contact Us
- Client Login
Market News Commentary - From The Desk of David Loesch 10.15.2020Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on October 15th, 2020
- State and local government lobbying groups are pressing Powell and Mnuchin to expand the scope of the Central Banks $500B Muni Credit Line and create a program to purchase bonds in the secondary. If this happens, it will be a significant uplift to our markets, similar to what we saw in the corporate market two months ago. It will be interesting to watch how it develops, big news for our markets.
- The state of IL will be considering borrowing again from the Fed’s lending reserve next week. The state indicated that if there is no support from the FED Government in the form of a loan, it will need to access the Liquidity Facility once again. IL is in the process of passing a gradual income tax law that will go into effect next year. The tax will be 4.75% to 7.99% for individuals to help the shortfall.
- States saw their tax revenue drop by $31B or 6% from March through August. Even though this is “bad news," this drop is less than expected relative to the economic contraction's depth. This information also comes after several states indicated that their revenue did not decline as much as anticipated. Overall, this is positive for our markets, and perhaps one reason we have not seen our pricing collapse over the past 45 days.
- Visible supply continues to rise as municipalities rush to the marketplace to issue debt before the elections. I saw an article on Houston as it related to sales taxes. Houston collected about $50MM in sales taxes in August, marking an 11% decrease from the same period a year ago. I suspect many other cities will experience this type of news as we move through the balance of this year. This decline will impact many city budgets for the first two months of 2021.
- Overall pricing on MUNI’s is not following the T markets; supply and demand are moving our markets now and have been for the last two weeks.
- Benchmark state 10-year yields: CA 1.18. FL .96, IL 3.82, NY .97, PA 1.23, and TX 1.04
605-B Park Grove
Katy, TX 77450
This report has no regard to the specific investment objectives, financial situation, or needs of any particular recipient. This report is based on information obtained from sources believed to be reliable, but no independent verification has been made, nor is its accuracy or completeness guaranteed. This report is published solely for informational purposes and is not construed as a solicitation or an offer to buy or sell securities or related financial instruments. Opinions expressed herein are subject to change without notice and the division, group, subsidiary, or affiliate of MACC., which is under no obligation to update or keep the information current. The securities described herein may not be eligible for sale in all jurisdictions or to specific categories of investors. MACC accepts no liability for any loss or damage of any kind arising out of the use of this report. Please contact your tax advisor regarding the suitability of tax-exempt investments in your portfolio. Income from municipals may be subject to state and local taxes as well as the Alternative Minimum Tax. Corporate and Municipal securities are subject to gains/losses based on the level of interest rates, market conditions, and credit quality of the issuer. As with any security, there is an inherent market risk possibility as to principal if the security is not held to maturity. The bonds that are non-rated (NR) should be considered for investment by knowledgeable and sophisticated investors. Additional information will be made available upon request.
Securities are offered through Mid Atlantic Capital Corporation (MACC), a registered Broker-Dealer, Member FINRA/SIPC.
The DRL Group. is not a registered entity or a subsidiary or control affiliate of MACC.
Bonds are subject to market and interest rate risk if sold prior to maturity. Prices and availability may change at any time without notice. Insured bonds are subject to the claims-paying ability of the insurance company.
Reminder: Email sent through the Internet is not secure. Do not use email to send us confidential information such as credit card numbers, change of address, PIN numbers, passwords, or other important information. Do not email orders to buy or sell securities, transfer funds, or send time sensitive instructions. We will not accept such orders or instructions. This email is not an official trade confirmation for transactions executed for your account. Your email message is not private in that it is subject to review by the Firm, its officers, agents, and employees. Unless expressly stated in this email, nothing in this message should be construed as a digital or electronic signature.