Broker Check

Market News & Commentary - From The Desk Of David Loesch 02.02.2023

February 01, 2023
  • This week, Bloomberg News reported that some of America’s biggest bond buyers, pension funds, and corporate-defined benefit plans, flush with cash, plan to re-allocate to bonds to the tune of $1T. This “de-risking” move will have a “far-reaching” impact from cash flooding into the fixed-income market. This should have a positive effect on all Fixed Income debt.
  • According to JP Morgan’s strategist, Marko Kolanovic, “This represents a unique and urgent opportunity for these funds to lock in favorable funding status by selling equities and buying bonds.” (See full article below) As these buyers enter the market, it should cause additional tight supply and keep demand strong.
  • MUNIs are poised for the best start of the year in more than a decade amid slower sales and robust investor interest; this should be no surprise with the comments over the last few weeks. With those worries easing, even with the FED hike coming this week, investors are more confident that the Central Bank is nearing the end of its tightening cycle, which has contributed to a flurry of cash added to MUNI bond funds. With this optimism and overall confidence in the markets, we should continue to see this rally.
  • The DRL Group has been saying January’s performance has benefited from fund inflows, bond redemptions, light supply, and restoration of investors' confidence, all of this with "moderate" inflation. February is typically a strong month for interest payments, as cash should flow back into the markets. The new-issue calendar will stay light until March as issuers are waiting to determine the FED's next course of action, with comments coming out this week. Pricing should remain firm.
  • Another aspect of issuance, I suspect we will see this pick up once the FED indicates they are “nearing the end” of the rate moves; this does not mean we will see a flood of issuance. Municipalities will start to line up their books for refunding's again, which should happen in the back half of 2023.

David Loesch

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 (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.