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The Governor of Illinois reported plans to sign a $55.1 billion budget for 2026, which generates revenue from higher taxes on smokers, gamblers, and large multi-state businesses while pulling delinquent taxes into state coffers through a six-week amnesty program. This tax should not change the rating on IL State GO paper based on the increased revenue potential identified. Rating agencies will likely want to see how the additional sources of revenue impact the state’s finances.
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Dallas Fed President Lorie Logan said the US central bank can remain patient as it assesses risks to both inflation and unemployment. “We are seeing risks on both sides of our dual mandate that appear to be fairly balanced,” Logan said Monday during a meeting hosted by the Dallas FED. This will continue to leave the FED positioned to wait for data and be “patient.” If information changes the balance of risk, Logan indicated they are prepared to respond. Patience is the “keyword” with the FED right now…we will continue to see them on the sidelines for rate moves.
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Factory orders in the US contracted for a third consecutive month, and a gauge of imports fell to a 16-year low as firms pulled back in the face of higher tariffs. This number is one indicator of how tariffs could and would impact our country; as mentioned, many are waiting to see how the tariffs will affect not only consumers but also large corporations. If we did not have the tariff issues surrounding us, this would continue to add reasonings for a rate cut.
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Muni Fund flows continue to remain strong, as investors added $1.43 billion in the week ending May 28. The prior week saw a $1.44 billion inflow, which is a testament to the demand for investments that have tax advantages, such as MUNI funds and individual bonds. As long as we see yields at these levels, fund inflows will continue, and demand for individual MUNIs will remain firm.
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The Treasury and MUNI markets added to early gains on June 4, following ADP Research data that showed private sector job growth was the weakest in two years. Overall, this resulted in a slight decrease in yields across the board for MUNIs and Treasuries. We saw the long end of the Muni curve cut 3 bps with this move.
Securities offered through NewEdge Securities, LLC, member FINRA and SIPC. The DRL Group is not a subsidiary or control affiliate of NewEdge Securities, LLC. NewEdge Securities, LLC. has no affiliation to BondDesk Trading LLC or BondTrader Pro, or Tradeweb Direct, Bondpoint, TMC, Market Axess or any ECN.
Yield to call (YTC) is not indicative of total return; this yield is valid only if the security is called. Bonds may or may not be called, or be callable on multiple dates or, in other cases, called any date following the first call date, so yield to call is based on the earliest stated call date. Discounted bonds may be subject to capital gains tax. Bonds may be subject to OID (Original Issue Discount). Prices and availability may change at anytime without notice.
Do not buy bonds based on the Yield to Call (YTC). Insured bonds are issued for timely payment of principal and interest only. Insured bonds do not cover potential market loss and are subject to the claims paying ability of the insurance company.
Non-rated (NR), With-Drawn (WR), or below investment grade bonds, lower rated bonds, carry a greater potential risk of default & should be considered by sophisticated investors only.
This document is for informational purposes only and does not replace or serve as a substitute for your official monthly statement generated by NFS. Please refer to your official statement for accurate and comprehensive account details.
Bonds may be subject to capital gains tax. This summary is for informational purposes only and is not an offer or solicitation for the purchase or sale of any security or a recommendation or endorsement of any security or issuer. NewEdge Securities, LLC. and DRL Group make no representation about the accuracy, completeness, or timeliness of this information. Bonds could also be subject to the DeMinimis Rule, please consult with your tax advisor for further clarification.
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