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Market News Commentary - From The Desk of David Loesch 11.14.2019Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on November 14th, 2019
- Taxable MUNI's continue to make headlines; there was an article in the WSJ and BB about Overseas Buyers sucking up taxable muni's. Zurich is the largest buyer, along with Mellon investments. With the unprecedented negative returns in Europe, this is has become a very attractive asset class.
- Requests for CUSIP's last month were at an accelerated pace, showing signs of an increased issuance as we move through November and December. These requests increased 34.2% for November, and I suspect that we will see a significant issuance as we move into the end of the year.
- Forty-two issuers have missed payments this year, exceeding the amount from 2018. This year’s defaults have impacted 2.8B of MUNI’s.
- PA Turnpike traffic growth continues to be overly optimistic; many believe that the traffic will be down over the next year; this credit is now on review by the rating agencies.
- The FED will be addressing Congress this week; rates will surely be on the agenda along with the outlook for 2020. Powell’s testimony will most likely be market moving. I do not anticipate any rate move talk; however, I don’t think he will rule out any cuts for the rest of this year.
- The street, along with retail, continues to look for paper; with the 11/15 payments coming up and significant refinancing's coming in December, I expect a record amount of cash available to the markets.
- Many are calling for a significant market decline if the Democrat’s win the election, most recent is Tudor Jones. I, along with many, agree with this fact. Our markets should perform well; however, if you recall, many thought the equity markets would move down with Trump winning, and they did the exact opposite.
- China continues to indicate the best way to end the trade war is to lift the tariffs, if this is their attitude then the trade war will continue for many months. Trump has held his ground and refuses to lift without some reconciliation, this will impact our markets as indicated before.
- NYC economy slowed in the 3rd Q as private sector hiring sank to a 10-year low and wage growth moderated. The city grew at 2.4% down from 3.10%, I do not expect this to impact the MUNI’s.
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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