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 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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