Municipal New Issuance: Last week, the negotiated calendar totaled to just over $10 billion with the largest deal being the $1.5 billion New York City GO issue which AmeriVet participated in the Selling-Group. The next largest deal was the $1.3 billion Hillsborough County Development Authority for the BayCare Obligated Group Health System followed by the $723 million Cities of Dallas and Fort Worth Joint Revenue Refunding and Improvement Bonds issuance for the Dallas Fort Worth International Airport.

Municipal Secondary Trading: Last week, secondary trading totaled to approximately $37.5 billion with 54% of trades being dealer sells. According to Bloomberg, clients’ bids-wanted totaled to just over $4.87 billion which is slightly less than the prior week’s bids-wanted total of $4.98 billion.

Municipal Spreads: Muni yields rose this past week with 10-year notes rising by 2.7 basis points to end the week at 2.69%. With muni yields rising last week, munis cheapened versus Treasuries as the 10-year ratio is at 70.73%, compared to the prior week when the ratio was at 68.51%, and just one month ago the ratio was at 65.85%. We did see the muni curve steepen sharply last week as the curve steepened by 18.6 basis points to 115 basis points which is the steepest the curve has been since Sept 2022.

According to LSEG Lipper Fund Flows data, muni bond funds saw investors add approximately $500 million which follows the prior weeks inflow of $530 million. This marks eight straight weeks of inflows for muni funds. With the Fed rate cut almost certain in September and nerves caused by market volatility easing, we should continue to see more inflows into bond funds.

With just one week left in August, muni returns for the month totaled to .78% bringing our year-to-date returns to 1.28%. We have seen a stark reversal in returns for August as the same time last year, muni returns for the month of August were down 1.79% as the Fed was still in rate hike mode to combat high inflation. Last year, we saw 10-year yields in August rise by about 36 basis points with yields rising an average 26 basis points across the curve. At this time in 2024, 10-year yields have fallen by 2.5 basis points, with the front end seeing yields drop by an average of 22 basis points, and the long end remaining flat. With Fed Chair Powell stating late last week that it was time to adjust its policy and cut rates, we should expect to see the market react to his Chair Powell’s statements by pushing muni yields lower as we have already seen Treasury yields tumble and stocks rise after he spoke.

Municipal Supply: The negotiated calendar for the last week of August will have an expected volume of about $7.7 billion with the largest deal being the $2.6 billion State of California General Obligation Bonds issuance which AmeriVet will be participating in the Selling-Group. The next largest deal of the week will be the $1 billion City of Chicago General Airport Senior Lien Revenue Bonds issuance for the Chicago O’Hare International Airport. AmeriVet will also be participating as a Selling-Group-Member for $58 million Maryland Department of Housing and Community Development Housing Revenue Bonds issuance and as well as the $13 million Minnesota Housing Finance Agency State Appropriation Bonds issuance for Housing Infrastructure.