Municipal Bond News

• Fund flows into Muni funds continue to be healthy and could be the largest on record for 2019, and funds will need to buy paper.
• Powell is expected to seek another rate cut at the next meeting; many are betting it will be 50bbps.  Retail sales are up; however, overall economic issues still plague the country, starting with the trade issues.  Right now, the market is p

Bonds Rally and Stocks Drop as Trade, Fed Mulled: Markets Wrap
2019-08-20 13:59:51.696 GMT

By Rita Nazareth and Laura Curtis

(Bloomberg) -- Treasuries climbed and stocks fell as investors assessed the latest news on trade negotiations and awaited more clues on monetary policy.

• As you know, I have been discussing recession since January; there was a published report this morning that the likelihood of a recession next year has now risen to 35%, as global trade tensions rise.  Growth in the world’s biggest economy will avert 2.30% this year down from 2.50%.

• Traders of Fed Fund futures boosted the amount of easing they expect from the U.S. central bank this year, particularly after Trump abruptly escalated the trade war with China last week. We've indicated for the past several months that the trade war will drive the markets, and this is very true. We just went through a good earnings season.

• Texas A&M sold 430MM in taxable municipals last week while targeting potential buyers in Japan, Taiwan, and Singapore.  The overall thought process was that Taxable MUNI's are the perfect investment vehicle for overseas investors.  The deal was done in a matter of hours and was 3x oversubscribed. 
• CBE’s (Chicago board of education) will sell 432M of

• You know when the MUNI market is hot when you have a deal that defaulted 7 years ago and wiped out 98% of the investors’ money and returning to market next week.  This would be the Las Vegas Monorail, a deal that was done, went into BK, took 98% of the money and did not return it due to restructuring and now coming back to the market with a 19.7MM deal which will be unrated.

• P.A. will sell 90MM of MUNI's to help counties upgrade their voting systems ahead of the 2020 elections.  This type of bond financing is strange with no "real revenue" tied to it, P.A.

• The University of Alaska may have the ratings on $343 million of its bonds downgraded by Moody’s Investors Service after the governor cut fiscal 2020 state appropriations to the system by 41%.
• President Trump nominated Judy Shelton and Christopher Waller to the Fed board.

• Economists now expect the Federal Reserve to cut interest rates multiple times this year -- coming around to the view held by investors, though they haven’t gotten all the way there yet.
• The current U.S. economic expansion on Monday became the longest in records dating back to the Franklin Pierce administration.

• Economists now expect the Federal Reserve to cut interest rates multiple times this year -- coming around to the view held by investors, though they haven’t gotten all the way there yet.
• The current U.S. economic expansion on Monday became the longest in records dating back to the Franklin Pierce administration.