Broker Check

Market News & Commentary - From the Desk of David Loesch 03.07.2024

March 06, 2024


  • Nearly $27 billion will be repaid to investors this month through maturing bonds and calls. Investors will reinvest this cash in our market, keeping demand steady.
  • Primary market: The most significant underwritings expected to price this week include a $997.7 million issue for the University of California and an $876.4 million issue for the Midland Independent School District, TX.
  • Jerome Powell is encountering increased pressure from Democrats advocating for interest-rate cuts to sustain the economy during an election year, as well as Republicans urging him to abandon a plan to bolster bank capital. The Federal Reserve Chair will appear before Congress this week for his semiannual testimony, marking two years since they began the campaign against inflation. This topic will be the scenario all year, especially in an election year; we will see each side push the FED for what works for their party.
  • The Biden administration plans to allocate $9.8 billion in federal funds to public transit agencies, emphasizing its commitment to investing in US infrastructure before the November reelection campaign. A senior administration official stated that these investments will facilitate faster and more affordable travel for people.
  • Money-market fund assets have reached an all-time high amid anticipations that short-term interest rates will persist at elevated levels following a pullback in expectations for the Federal Reserve's first rate cuts this year.
  • Florida boasts over 1,200 golf courses, the highest number among all states in the US. However, Cabot, a Canadian company, has ambitious plans to establish a resort community catering to affluent residents, spanning over 1,000 acres. The development will receive $40 million in municipal debt through a sale orchestrated by a Special District, scheduled this week. These funds will primarily be used for essential infrastructure such as roads and utilities. This initial sale marks the beginning of a series of planned municipal bond offerings for the development.
  • New Jersey Governor Phil Murphy suggested imposing a fee on the largest businesses in the state to assist its beleaguered public transportation system. Murphy intends to introduce the "Corporate Transit Fee" during his budget presentation for the forthcoming fiscal year. As outlined in a preview of Murphy's remarks, this fee will apply to corporations with net incomes surpassing $10 million. It will be interesting to see reactions to this.
  • Bond traders no longer expect the Federal Reserve to lower interest rates by more than 75 basis points this year, bringing their view in line with what Fed policymakers have indicated is the likeliest outcome. I think we will have 3 – 25 basis point cuts after June, but we will see as we get closer.

 

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.

 

 

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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