- The Supreme Court declined to review a New York-led constitutional challenge to the $10,000 cap on state and local tax deductions imposed by Congress in the 2017 tax law. The high court issued an order Monday denying the request from New York, New Jersey, Maryland, and Connecticut to review a decision of the U.S. Court of Appeals for the Second Circuit. The appeals court rejected several state legal arguments against the cap, including that it unconstitutionally coerces the states to abandon their preferred fiscal policies. The cap generally blocks taxpayers who itemize from deducting more than $10,000 per year for paid state and local taxes, including property taxes and income or sales taxes. This issue will benefit bonds from those states, as those customers will look for items to avoid taxes and will help increase demand for muni bonds.
- New-issue sales of municipal bonds due within 18 months have fallen 48% to $3.2 billion so far this year, the lowest amount for the period through at least 2003, according to data compiled by Bloomberg. It's a marked reduction compared to the boom in short-term sales in recent years, a trend that the pandemic extended in part due to emergency loans from the Federal Reserve's Municipal Liquidity Facility. This will be beneficial for our markets as we will have a lower supply and will help recover from the past few months.
- New U.S. home construction rose unexpectedly in March to the highest level since 2006, boosted by multifamily projects as builders seek to replenish housing inventory. I find this interesting because we have seen mortgage requests go down in the last couple of months, signaling a slowdown in the real estate market that rapidly increased last year. According to CNBC reporting, the thirty-year fixed mortgage rates reached 5.35% this week, a 12-year high.
- According to a study released Tuesday, business travel revenue for the U.S. hotel industry is expected to fall some $20.7 billion short of pre-pandemic levels this year, after an estimated $108 billion decline over 2020 and 2021. We will continue to see this industry bounce back to reasonable pre-pandemic levels.
- "History suggests that the Fed will face a difficult task in tightening monetary policy enough to cool inflation without causing a U.S. recession, with the odds of a contraction at about 35% over the next two years.", according to Goldman Sachs. The Fed's main challenge is to reduce the gap between jobs and workers and slow wage growth to a pace consistent with its 2% inflation goal. They hope to accomplish this issue by tightening financial conditions to reduce job openings without sharply rising unemployment.
- The Fed is setting expectations they will raise rates next month by 0.5 %; I think this will happen.
605-B Park Grove
Katy, TX 77450
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.