Municipal New Issuance: With the Fed rate decision last week, many issuers took a break from issuing as the negotiated volume totaled to just over $2.3 billion for the week with the largest deals of the week being the $190 million Connecticut Housing issue followed by the $170 million Dallas Texas issue for the Hutchison Convention Center. Southern California Public Power Authority issued $161 million in green bonds. 

Municipal Secondary Trading: Secondary trading for the week totaled to just over $58.27 billion with 55% of all secondary trades being dealer sells. Coming off a week that saw a record number of bids-wanted, clients this past week put up roughly $9.812 billion up for the bid.

Municipal Spreads: Munis rallied this past week, as they followed U.S. Treasures gains due to investors reacting to the Fed leaving rates unchanged last week. Yields on 10-year notes fell by 27.3 basis points to end the week at 3.37%. Yields hit their highest mark in 15 years earlier in the week before rallying due to the Fed showing signs of being done with rate hikes. With the rally, munis were able to outperform Treasuries as 10-year notes are yielding 73.73% compared to 75.35% a week ago, and 74.46% a month ago. We did see the muni curve flatten by 0.2 basis points to end the week at 87 basis points.

According to LSEG Lipper Global, investors pulled about $1.1 billion from municipal bond funds this past week, which follows the prior week’s outflow of $940 million, marking the ninth straight week of outflows. Although muni bond funds are seeing outflows, we are seeing an increase of inflows into muni ETFs as last month we saw a record inflow of $2.5 billion as higher yields are enticing buyers due to cheaper beta and tax-exempt exposure.

November is off to a good start as yields have dropped for the first days of the month and have dropped 5 consecutive days for the first time since June of this year. This is positive news for munis as munis have posted a total-negative return loss for three straight months. November has been particularly positive for munis since we have only seen three down months with only one having a outsized month back in 2016. With supply continuing to fall short of demand, investors will be in tax-loss-swapping mode coupled with the markets being oversold and investors having cash to invest, we do expect November to have positive returns.

Municipal Supply: The negotiated calendar this week will have an expected volume of about $6.3 billion with the largest deal being the $690 million Salt River Project Agricultural Improvement issue. The second largest deal of the week is the $404 million Massachusetts Clean Water Trust issue followed by the third largest deal of the week, being the $475 million Maryland Department of Housing and Community Development issuance that will have taxable and tax-exempt bonds which AmeriVet will be participating as a Selling-Group-Member. AmeriVet will also be a Selling-Group-Member for the $356 million University of Connecticut refunding issue. AmeriVet will be participating in the $61 million Minnesota Housing Finance Agency issuance as a Selling-Group-Member as well.