Municipal New Issuance: Last week, the negotiated calendar totaled to approximately $6.98 billion, with the largest deal of last week being the $1.1 billion City of New York GO which AmeriVet participated in the Selling-Group. The second largest deal of last week was the Port of Seattle Intermediate Lien Revenue Refunding Bonds issuance which consisted of $650 million of AMT bonds and $169 million of tax-exempt bonds. The third largest deal of the week was the $638 million Black Belt Energy Gas District Project Gas Project Revenue Bonds issuance. The majority of the new issues this previous week did relatively well as we saw the majority of the issues garnering significant interest.

Municipal Secondary Trading: Last week, secondary trading totaled to approximately $41.37 billion with 58% of trades being dealer sells. According to Bloomberg, clients’ bids-wanted was just over $4.2 billion compared to the prior week’s bids-wanted total of $6.23 billion. With the large rally in the muni market and everyone expecting the Fed to cut rates in September, it comes to no surprise that bids-wanted levels were low this past week.

Municipal Spreads: Munis continued to improve this past week as we head into August. This past week yields on 10-year notes fell by 18.2 basis points to end the week at 2.60%. Although we did see yields fall, munis continue to lag with the 10-year muni-to-Treasury now yielding 68.35% of Treasuries compared to a week ago when the ratio was at 66.31%. The muni curve remained flat at 85 basis points despite the muni yields falling.

According to LSEG Lipper Global Fund flows data, muni bond funds indicate that they had their second largest inflow of the year as investors added about $1.1 billion to their funds and this follows the prior weeks inflow of $866 million. This largest inflow of the year was back in January when inflows hit $1.41 billion. With equity markets taking a beating this past week, we should see a rise in inflows as investors flock to safer assets.

As we head into the back 9 of 2024, munis are continuing to have a strong second half of the year as current returns for year are now at 1.46%. Prior to the start of the Q3, munis were down roughly .40% but the July rally and the first couple of days of August are being off to a hot start, muni returns for the month are at .95%. Prior to the jobs number, muni yields were down an average of about 6 basis points, but on Friday alone we have seen yields drop by roughly 9 basis points giving us a 18 basis point rally for the week. With the recent economic numbers indicating that we should expect that the fed will reduce rates in September due to the weak jobs data on Friday, we should continue to see munis push further into positive territory. Additionally, we should anticipate that there will be increased inflows in mutual funds and ETF’s as investors are poised to receive roughly $47 billion and $14 billion respectively in interest this month alone which should fuel the demand for new munis pushing yields even lower.

Municipal Supply: The negotiated calendar for the week will have an expected volume of approximately $12.8 billion. The largest deals of the week will be the $1.3 billion Louisiana Public Facilities Authority Senior Lien Revenue Bonds issuance followed by the $1 billion Long Island Power Authority Electric System Revenue Bonds issuance. AmeriVet will be in one issue this week as a Co-Manager for the Trustees of the California State University which will be issuing $682 million tax-exempt bonds and taxable bonds. AmeriVet will also be participating in the Selling-Group for the $150 million South Carolina Housing Mortgage Revenue Bonds issuance. So far, municipal supply is up 36% compared to the same time as last year.