Broker Check

Market News & Commentary - From The Desk Of David Loesch 02.08.2024

February 07, 2024
  • Primary market: The most significant sales expected to be priced today include a $1 billion issue for the New York City Transitional Finance Authority Future Tax Secured Revenue and a $540 million issue for the Commonwealth of Massachusetts. This is the second $1 Billion new issue to NYC recently.
  • Munis could see some additional weakness next week as the market adjusts to where Treasuries have moved. Across the curve, the most significant margin of outperformance was in the shortest debt, with AAA Muni rates declining 15 bps, compared with Treasury rates' 1.5-bp increase. At the long end of the curve, performance flipped, with munis falling 13.1 bps vs. Treasuries' 14.8-bp drop.
  • The Washington Metropolitan Area Transit Authority is considering a 12.5% fare increase starting in July to address a budget shortfall. There were discussions about significant service cuts, but that has been shelved to prioritize fare hikes. Additionally, there were talks about reducing the workforce, which currently stands at 12,000 employees, but this option is no longer on the table. We could see more news like this on similar structures. The pandemic still has lingering effects on some major cities' transportation systems.
  • Investors are returning to the municipal bond market, marking a significant shift from the disinterest over the past two years. Capital has been flowing back into municipal bond funds consistently for the fifth consecutive week, reaching a notable two-year peak of $1.5 billion in weekly inflows. Despite having withdrawn over $120 billion in the last two years, investors are now enticed by the market's potential for higher yields in anticipation of forthcoming interest rate cuts.
  • Barton College, a private college predominantly enrolling North Carolina students, was downgraded one notch to BB+ by S&P Global Ratings. We could continue to see downgrades in colleges in the years to come. Colleges are having lower enrollments, and costs for students are getting higher.

 

At The DRL Group, we specialize in helping high-net-worth investors maximize tax-free returns by proactively maintaining their custom bond portfolios through all market conditions.

We would love the opportunity to visit with you further. Please click here to schedule a call with one of our specialists or contact us at 281-398-8600.

 

David Loesch

dloesch@drlgroup.net

www.drlgroup.net

605-B Park Grove

Katy, TX 77450

866.664.4040 (toll-free)

281.398.8600 (direct)

 

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