Market News Commentary - From The Desk of David Loesch 12.28.2018Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on December 28th, 2018
- States collected more than a trillion dollars in tax revenue in fiscal 2018. This growth is unlikely to be sustained, the tally increased by 7.8% from 2017. These numbers are excellent for our markets, High Grade bonds continue to add stability in retail accounts, accounts recognize this and will always buy this asset class.
- On 12/19/2018 the hike was expected, however the “downward shift” in the forecast horizon was a bit of a surprise. The FED indicated 2 hikes down from 4 in 2019, this is overall good news for both the equity market and the FI markets. Many believe that T bills have much further to rally.
- 10T this morning on 12/20/2018 seems unchanged at a 2.77%. DOW futures are down slightly while Gundlach and others are wondering if the Bull Market in equities has ended.
- Funds have been hit with 12 weeks of outflows, it will be interesting to see if this exodus stops with the volatility of the equity markets. This trend stopped this week as investors added 255MM into funds. As we move through next week, I think you will see this trend continue which should equate into higher pricing.
- As we move into 2019 I think two of the topics will be infrastructure build out and bigger returns. Infrastructure has been on the minds of many and will create additional liquidity, returns need to be better in 2019 as compared to 2018. The lack of supply will continue and pricing should hold firm with this. US banks I believe will continue to decrease their exposure to MUNI’s however retail will pick up that slack.
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.
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