Market News Commentary - From The Desk of David Loesch 12.4.2018Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on December 4th, 2018
• Powell speaks on 11/28/2018 about the “existing frameworks for financial stability.” Trump continues to display his dissatisfaction in the current chairman as we move into the balance of this year with rising rates ahead of us.
• Overall home prices gain in 20 US cities; however, mortgage applications continue to fall due to higher rates. The average gain is 5.10% from a year ago, led by Las Vegas and San Francisco.
• NY Westchester County lost its AAA rating from S&P on 11/28/2018 after drawing down cash reserves to cover retroactive raises given to government employees.
• A bill to help PG&E in Congress will absorb billions of dollars in the potential liabilities from this month's deadly wildfires. This bill will allow PG&E to issue bonds to pay off costs tied to the fires, as well as give much needed operating cash.
• States unfunded liabilities for health care and other non-pension benefits increased by 10% to 678B in 2017 and continues to increase in 2018. This makes this 3rd straight increased year of liabilities of this nature.
• Kashkari (FED member) indicated that rates should not go up when job creation is strong, and inflation is tame on 11/30/2018. This is a huge statement that contradicts Powell just 2 months ago.
• Equities are set to open much higher on 12/3/2018 as the Trade tensions between the US and China have eased from the G20 summit
• DFW is planning on issuing 10-11B of bonds over the next 5-7 years to increase gate capacity as well as to refund existing debt. Many of the bonds will be taxable in hopes to attract international and banking buyers. This deal will be one of the largest in the state of Texas and will be publicized widely. The deal will take place over the next few years, and will have a 10-year capital plan negotiated with the airlines.
• Honeywell is moving out of NJ due to high taxes and cost of real-estate.
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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