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AmeriVet Weekly Muni Snapshot

Municipal New Issuance: For the final week of June, the negotiated calendar totaled to just under $9.5 billion. The largest deal of last week was the $1 billion Massachusetts Bay Transportation Authority Senior Sales Tax Bonds 2024 Series A & B issuance. The second largest deal of last week was the $770 million Triborough Bridge and Tunnel issuance for the MTA Bridges and Tunnels. Last week, AmeriVet participated as a Selling-Group-Member for the New Hampshire Housing Finance Authority’s Single-Family Mortgage Acquisition Revenue Bonds Series C issuance. June issuance for the month totaled to approximately $41 billion, up 4% from last year in 2023, and the most for any month total since 2021.

Municipal Secondary Trading: For the final week of June, secondary trading totaled to just over $39.8 billion for the week with 56% of secondary trades being dealer sells. According to Bloomberg, clients put up roughly $6.25 billion up for the bid, which is an increase of $1.21 billion from the prior week’s client’s bids wanted total of $5.04 billion.

Municipal Spreads: For the final week of June, munis rose for the first time for the month, with 10-year notes rising by 5.2 basis points to end the month at 2.86%. With the rise in yields, munis did outperform Treasuries this past week as 10-year notes are now yielding 65.35% of Treasuries, compared to 66.17% from a week ago. At the beginning of the month, the ratio was at 63.5%. We did see a slight flattening of the muni curve last week with the curve flattening by .5 basis points to 65 basis points.

According to LSEG Lipper Global Fund Flows data, muni bond funds saw investors pull nearly $498 million from their funds. This outflow follows the prior weeks inflow of $16 million. The outflows for this past week were led by long-term funds, a complete reversal of what we have seen in the last few weeks which has been significant inflows into long-term funds.

June’s performance was a complete 180 of what we saw back in April and May as Junes returns of 1.53% are pushing year-to-date returns closer to positive territory with year-to-date returns now at -.40%. Munis are set to have their best June since 2016. Munis have been positive this month as demand has outpaced supply and munis are riding the momentum of the rally in the Treasury markets as recent data indicates inflation has cooled supporting signs that the Fed may begin cutting rates later this year. As we head into the second half of the year, we should expect to see July follow in the footsteps of June even though July is typically is a slow month for munis. The month of July has had negative returns for two years in a row but the demand for reinvestment still remains high and could possibly snap July’s losing streak of negative returns.

Municipal Supply: With the July 4th holiday this week, the negotiated calendar will be very small with an expected volume of just $65 million. The largest deal of the week will be the $38 million Pismo Beach Public Financing Agency Lease Revenue Bond issue.