Municipal New Issuance: Last week, the negotiated calendar for the week totaled to just over $10.6 billion, with the largest deal of the week being the $959 million California Community Choice Financing Authority for their Clean Energy Project. The next largest deal of last week was the $762 Dormitory Authority of the State of New York. AmeriVet participated in two deals this past week as a Selling-Group-Member for the $490 million Commonwealth of Massachusetts Transportation Fund and the $45 million New Mexico Finance Authority Senior Lien Public Project Revolving Fund Revenue Bonds issuance.

Municipal Secondary Trading: Last week, secondary trading totaled to approximately $40.44 billion with the majority of trading being on Tuesday. According to Bloomberg, clients bids-wanted last week totaled to just over $3.78 billion, down from the prior week’s bids-wanted total of $4.82 billion.

Municipal Spreads: For the first week of the 4^th quarter of 2024, muni yields rose slightly across the curve with yields on 10-year notes rising by just .5 basis points to end the week at 2.61%. We did have a nice rally in the market earlier in the week, but with the employment number coming in better than expected, yields were pushed higher for the week as many are expecting to see the Fed cut rates by 25 basis points rather than 50 basis points. Munis were able to outperform Treasuries despite the rise in yields as the 10-year muni-to-Treasury is now yielding 66.37%, compared to the prior week when the ratio was at 70.09%. Just one month ago, the ratio was at 71.27%, With yields falling this past week, the muni curve did steepen slightly by 1 basis point to 117 basis points.

For the 14^th consecutive week, muni bond funds saw investors add approximately $1.9 billion to their funds as investors continue to pour into muni bond funds to grab higher yields before the Fed makes a decision to cut rates any further this year. This was the largest for weekly inflow into muni funds for 2024.

Prior to the release of the better than expected employment numbers last week, most traders had expected to see the Fed cut rates by 50 basis points at their next meeting. However, with a stronger than expected employment number of 254k compared to the consensus of 150k, many are now speculating that the Fed will now only cut 25 basis points in November. This pushed Treasuries higher with the 10-year nearing 4%. This has also sent muni yields higher by roughly by 1 to 5 basis points across the curve since the employment number came out. With a 50 basis point cut all but off the table, Treasury yields are being pushed higher as well as munis. Munis are continuing to outperform Treasuries as ratios have continued to richen with the 10-year ratio richening by 3.5 percentage points since the first rate cut last month. We have also seen a richening in other parts of the curve with the 30-year ratio moving in favor of munis by 3.1 percentage points. The 5 year and 2 year ratios have richened by 4.1 percentage points and 2.25 percentage points respectfully.

Municipal Supply: This week, the negotiated calendar will have an expected volume of $7.8 billion with the largest deals being the $1.5 billion City of New York which AmeriVet will be participating in the Selling-Group, followed by the State of Connecticut which plans of issuing $935 million to which AmeriVet will also be participating in the Selling-Group. The Philadelphia Authority for Industrial Development will issue $550 million. AmeriVet will be in 2 other issues this week, the first as a Co-Manager for the $259 million New York State Housing Finance Agency. Secondly, as a Co-Senior Manager for the $80 million Department of Veterans Affairs of the State of California. Currently, issuance is up by about 35% for year with year-to-date issuance being $380 million. To compare, total issuance for 2023 was at $384 billion. AmeriVet will also be participating in the Selling-Group for the $75 million New Hampshire Housing Finance Authority issuance.