Municipal New Issuance: Last week, the negotiated calendar for the week totaled to just over $8.56 billion with the largest deal of the week being the $1.5 billion New York City GO taxable issuance which AmeriVet participated in the Selling-Group. The second largest deal of last week was the State of Connecticut’s $935 million GO issuance which AmeriVet was also participated in the Selling-Group. AmeriVet was a Co-Manager on the $259 million New York State Housing Finance Agency State Personal Income Tax Revenue Bonds issuance. Additionally, AmeriVet participated in the Selling-Group for the $60 million New Hampshire Housing Finance Authority Single-Family Mortgage Acquisition Revenue Bonds issuance.

Municipal Secondary Trading: Last week, secondary trading totaled to approximately $39.12 billion for the week with the majority of the trading being done on Thursday. According to Bloomberg, clients bids-wanted totaled to roughly $4.7 billion for the week, which is an increase from the prior weeks bids-wanted total of $3.78 billion

Municipal Spreads: This past week, munis saw a significant rise in yields as the markets are repricing due to the expectations that the Fed will cut rates by 25 basis points next month instead of the 50 basis points that was originally forecasted a few weeks ago when the Fed began its rate easing cycle. Over the past week, yields on 10-year munis rose by 11.9 basis points to 2.75% as just one month ago, yields on 10-year notes were at 2.62%. With both Treasuries and munis weaker this past week, munis did underperform Treasuries as the 10-year muni-to-Treasury ratio is now yielding 67.38%. A week ago, the ratio was yielding 66.40%. We did see the muni curve steepen by 1.5 basis points this past week to 119 basis points.

For the 15^th consecutive week, muni bond funds saw investors add to their funds this past week as investors added approximately $418 million. Just prior to last week, investors added about $1.88 billion. Year-to-date muni funds have seen approximately $17 billion of inflows according the LSEG Lipper US Fund Flows Data. This is a complete 180 of the past two years where we saw outflows of $66 billion in 2022 and $145 billion in 2023.

We are just two weeks into the last quarter of 2024 and munis returns for the month are in the red with month-to-date returns down .56%, bringing year-to-date returns to 1.72%. We are still up from the last two years where returns were -.66% in 2023, and -11.43% in 2022. This past week, we saw yields rise by an average of 9.8 basis points across the curve as the recent CPI data was more negative than forecasted, and the jobs data report from the previous week has pushed speculation that the Fed may cut rates by only 25 basis points or take a pause. Despite the pull back in munis during these last couple of weeks, munis should continue to stay in positive territory until the end of the year as this pull back is most likely a market correction as most of the market is repricing to a 25 basis point cut next month instead of a 50 basis point cut that was initially forecasted.

Municipal Supply: This week, the negotiated calendar will have an expected volume of $9.7 billion, with the largest deal of the week being the $1.5 billion City of Chicago issue for the Chicago O’Hare International Airport which will include AMT, Non-Amt, and refunding bonds. The New Jersey Transportation Trust Fund Authority will be issuing two separate issues with the first being the $1.5 billion issue for the Transportation System Bonds, and a $1.2 billion for the Transportation Program Bonds. Both issues will consist of taxable bonds and tax-exempt bonds. The Dormitory Authority of the State of New York plans on issuing $500 million for the White Plains Hospital Obligated Group.