Broker Check

Market News & Commentary - From The Desk Of David Loesch 01.12.2023

January 11, 2023
Share |
  • Governor Gavin Newsom said C.A. would face a $22.5 billion budget deficit in the coming fiscal year, the first for the most populous U.S. state since 2018, as the global stock market rout and efforts to cool inflation hammer its tax collections.
  • Federal Reserve Governor Michelle Bowman said the Central Bank has more work to curb inflation, noting that further interest-rate increases are needed, and officials should hold them at restrictive levels for some time to stabilize prices. “In recent months, we’ve seen a decline in some measures of inflation, but we have a lot more work to do, so I expect the FOMC will continue raising interest rates to tighten monetary policy, as we stated after our December meeting,." Nothing new here, nothing we do not know. The only question is how high they will raise rates. How long will they continue to raise rates to try to manage
  • Texas is forecasting a record $32.7 billion budget surplus as a surge in sales taxes boosted the government’s revenue by billions more than what analysts had estimated.
  • Although recession fears and effects from coronavirus variants pose headwinds for the overall U.S. transportation sector in 2023, pent-up demand will propel air travel to pre-pandemic normalcy, while public transit and parking will face a slower recovery as remote work reshapes commuter patterns, according to a new report from S&P Global Ratings published Monday. Public transit will recover about 70% of pre-pandemic passenger levels by the end of 2023 and only 85% by the end of 2026, according to S&P's baseline activity estimates. This recovery is good for bonds in those sectors that were so highly affected during the pandemic. I believe we will continue to see opportunities here.
  • Job growth exceeded expectations last month, the unemployment rate fell, and wage gains slowed more than anticipated, suggesting some modest easing in inflation pressures. According to the Labor Department, nonfarm payrolls increased by 223,000 in December, capping a near-record year for job growth. The advance followed a revised 256,000 gain in November. Average hourly earnings rose 0.3% from a month earlier and 4.6% from December 2021 after a downward revision to November. The deceleration is welcome news for Fed officials, who see wage pressures, particularly in the service sector, as a critical hurdle to achieving their 2% inflation goal. The unemployment rate decreased by 0.1 percentage points to 3.5% as participation increased. The median estimates in a Bloomberg survey of economists had called for a 203,000 advance in payrolls and for wage growth to moderate to a 0.4% monthly pace.
  • Primary market: Visible supply began the week at $6.2 billion, well below the 2022 average of $9.8 billion. This week's most significant underwriting deals are a $680.7 million issue for the Plano Independent School District, TX, and a $441 million deal for the Municipal Electric Authority of Georgia.
  • According to Fitch, most public finance ratings and outlooks are expected to remain stable despite a worsening macroeconomic environment. More good news for Munis. We should have a strong year coming off 2022.

 

David Loesch

dloesch@drlgroup.net

www.drlgroup.net

605-B Park Grove

Katy, TX 77450

866.664.4040 (toll-free)

281.398.8600 (direct)

 

This report has no regard for the specific investment objectives, financial situation, or needs of any particular 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. The division, group, subsidiary, or affiliate of NewEdge Securities, Inc., 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 certain categories of investors. NewEdge Securities, Inc. 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 and 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 non-rated bonds (N.R.) should be considered for investment by knowledgeable and sophisticated investors. Additional information will be made available upon request.

 

Securities are offered through NewEdge Securities, Inc., a registered Broker-Dealer, Member FINRA/SIPC.

 

The DRL Group is not a registered entity or a subsidiary or control affiliate of NewEdge Securities, Inc.

 

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.