Market News Commentary - From The Desk of David Loesch 11.20.2018Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on November 20th, 2018
• S&P indicated that they might cut PG&E to junk in the next few months. They are calling for an at least 50% downgrade based on the CA fires.
• NY will sell 1.2B of GO bonds on 11/29, these will refund existing bonds while also providing funds to improve streets within the city.
• State 10-year benchmarks as of 11/20/2018: CA 2.79, FL 2.81, IL 4.39, NY 2.72, PA 3.24, TX 2.85 all down .02bbps
• Chicago BOE plans to sell 763.3MM of GO debt, 450MM will refinance previous bonds and 313.3MM will used to pay or reimburse the boards general operating budget expenditures. Bonds will be sold in 100M denominations.
• Rising rates impacts many. Mortgage applications are dropping at an all-time record pace, 3.20% for the past week alone. As we see rates move up and the FED indicating that they will continue to raise (next one coming Dec) many investors in both stocks and homes see this as negative news. Home builders, companies who borrow, people with credit card debit and bond investors are all feeling the sting of rates moving higher.
• Earnings have been poor, rates are moving higher, unemployment is low however that is not a good thing as many people are paid well to work but our nation gets into the trap of “overpaying” for jobs being done while the worker settles for mediocracy.
- The head of CA public utilities commission indicated that he cannot imaging allowing PG&E (states’ largest utility) to go into BK as it faces billions of dollars in potential liability and repairs from the wildfires.
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 firstname.lastname@example.org.
This content is based on the opinions of David Loesch based on his review of articles from Bloomberg.com or CNBC.com.
605-B Park Grove
Katy, TX 77450
866.664.4040 (toll free)
This report has no regard to the specific investment objectives, financial situation or needs of any specific 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 to be construed as a solicitation or an offer to buy or sell any 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 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: E-mail sent through the Internet is not secure. Do not use e-mail to send us confidential information such as credit card numbers, change of address, PIN numbers, passwords, or other important information. Do not e-mail orders to buy or sell securities, transfer funds, or send time sensitive instructions. We will not accept such orders or instructions. This e-mail is not an official trade confirmation for transactions executed for your account. Your e-mail message is not private in that it is subject to review by the Firm, its officers, agents and employees. Unless expressly stated in this e-mail, nothing in this message should be construed as a digital or electronic signature.