Broker Check

Market News & Commentary - From The Desk Of David Loesch 09.21.2023

September 21, 2023

  • Oppenheimer indicated to their clients that more issuers and investors are turning to MUNI insurance, which covers more than 50% of the new issue market. Bond insurance new issuance was lower during the first half of 2023, and many think this trend will reverse. In other words, underwriters will issue more insured paper as we move through the year. We continue to buy this type of product, insured paper currently trading >4.62% YTW if not higher. 
  • New US home construction dropped in August to the lowest level since June 2020. With rates where they are now, it is putting pressure on new home buyers and will add to the CPI numbers (bringing them down) over time with lower purchases.
  • The FED confronts a familiar issue as it tries to pilot the economy into a rarely seen soft landing. I suspect we will see a "soft landing" and yields move down over time, but not until the end of this year. Should we see this “soft landing” we suspect MUNIs will eventually rally.
  • The largest MUNI bond fund just saw the most significant weekly inflow in more than a year, and there are signs that demand is continuing, considering where yields are now. MUB (Index Fund) attracted about $920MM last week, the most since May 2022. This change is an encouraging sign, showing buyers in the street.
  • The FOMCE updated forecasts for their benchmark interest rate due today, and a potential key factor is T Bills, as they are at risk for their third straight year of losses. Powell continues to downplay the importance of the dot plot projections; many (including me) expect them to hold steady rates.
  • US holiday hiring for retailers is estimated to be the lowest since the financial crisis as the labor market cools and rates rise. Hiring is expected to add 410K workers in the 4th Q, the fewest since 2008. 
  • Household incomes fell in a third of all states nationwide last year, while just five saw median income levels improve. With the Auto Workers’ strike underway, one must consider how this will impact the jobs numbers as we move into October. The FED has been indicating they will need labor to come down.

Bottom line - yields are higher ~20 bps, in some cases higher.  Values are down however if you own quality, your account will be OK.  If you own lower credit qualities, you should consider re-evaluating your holdings here. 

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

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. 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. Bonds could also be subject to the De Minimis Rule, please consult with your tax advisor for further clarification.

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.