Broker Check

Market News & Commentary - From The Desk Of David Loesch 01.19.2022

January 19, 2022
  • As rates move up and supply levels drop, the outlook for new issuance has decreased despite growing investor demand and healthy state and local balance sheets. Rising rates will make some issuers “pause” as the cost to borrow no longer makes economic sense. I expect this trend to continue, which should help pricing as we move through the year.
  • Tax revenues in states continue to increase. NY State tax revenue soared to $84.4B in the first nine months of 2021, $12.9B more than forecasted. Many states are experiencing these increases. I believe this trend will continue through the year's balance, making MUNIs credit quality stronger. Overall tax rates for individuals should increase this year.
  • Many economists indicated that GDP plunged 16% in the first week of the year as the Omicron Variant weighed on demand for in-person activities and led to employee absenteeism and business closures. I am surprised how well the equity markets are taking this news. I expect some selloff based on GDP and overall production moving down. For 2022 many economists are expecting GDP growth to come in at 3.60% as compared to previously reported 3.90%. This will be good for fixed income investments, particularly higher-grade paper, as credits will continue to increase along with liquidity.

 

David Loesch

dloesch@drlgroup.net

www.drlgroup.net

605-B Park Grove

Katy, TX 77450

866.664.4040 (toll-free)

281.398.8600 (direct)

281.398.8607 fax

 

This report has no regard to the specific investment objectives, financial situation, or particular 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. 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 (NR) 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.