- California will sell its largest GO bond in two years. It is a tough time for the municipal debt market to get the $2.5 billion deal done. The cost to borrow on this loan may be higher than its outstanding securities yield and will pressure CA GO bonds as the deal comes to market.
- Muni flow continues to increase. A few setbacks could occur, but we should be on the better side most of the time. I think we will continue to see a decent pattern going forward.
- Municipal bond exchange-traded funds expanded by $66.4 million during the week ended Aug. 31, according to data compiled by Bloomberg; since then, outflows totaled $38 million.
- I think we will see another, already expected, .75 bps increase at the FOMC meeting. It will be interesting to see how the market reacts to that again.
- One year ago this week, two new GOP-based Texas laws took effect that sought to punish Wall Street for wading into environmental and social causes. These measures shook up the rankings of underwriters in the state, creating a new cast of winners and losers in one of the nation's biggest MUNI markets. These banks are now charting a comeback and have their work cut out to recoup market share from their rivals which continue to gain traction. CITI and JP Morgan are two of those banks. Texas took a stance, and not surprisingly, Texas won. The TX State Comptroller (Glenn Hegar) indicated that TX would not do business with banks who boycott the energy business, they continue that stance, and now many banks are changing their tune. I know this does not impact our markets that much as the deals will get done by other banks, such as Wells Fargo; however, I find it interesting to see how politics can play a role in the underwriting community.
- More and more financial companies are asking their team members to return to the office; Goldman and Jefferies are the latest. They indicate it is a compliance issue and a risk to their business having team members, mainly traders and operations, doing work from home.
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