Municipal New Issuance: With the Thanksgiving Holiday the negotiated calendar for the week was rather small with roughly $1.7 billion in issuance. The largest deals for the week were the $324 million New York Transportation Development Corp JFK Airport Project, followed by the $269 million taxable Denton Texas Independent School District.

Municipal Secondary Trading: With the holiday shortened week, there was very light trading as many traders and investors took Thursday as well as Friday off. For the week there was only about $16.7 billion in secondary trading with the bulk of the trading taking place on Monday and Tuesday. We also saw a large drop in client bids-wanted with the week totaling around $1.71 billion. With the final month of the year coming up we should expect to see the volume of secondary trading pick up as well as bid-wanted from clients.

Municipal Spread: Municipal bond yield levels remained virtually unchanged this past week mainly due to light trading from the Thanksgiving holiday. The 10-year Bloomberg benchmark remained relatively unchanged at 0.722% and the 30-year Bloomberg benchmark remained unchanged as well at 1.51%. The municipal bond curve remained unchanged at 1.354% for the week as well. Even with municipal bonds remaining static for the week, market performance levels improved compared to treasuries as they are now yielding 86.05% of treasuries. On Friday we reached 82.08% of treasuries which was the lowest, we have seen since early March, just before the Coronavirus pandemic forced business shutdowns in the US.

Municipal bond mutual funds inflows rose for the week to $2.15 billion, the weekly largest increase since August 19^th. Investors have added about $29.6 billion to those funds’ year-to -date, something many portfolio managers did not expect since we saw record number of outflows in the first half of the year.

Municipal bond performance has been very strong since the March sell-off with yields rallying to near their all-time lows. With yields near their all-times lows municipal bonds have become expensive again relative to treasuries something we have not seen since early March just before the massive sell-off that hit the markets due to the Coronavirus pandemic. As of Friday, 10-year municipal yielded roughly 82.09% of treasuries which has been the lowest since March. In March muni-treasury ratios jumped as high as 365% during the sell-off and have stayed elevated for a large portion of the year and with the strong 3^rd and 4^th quarter rally yield levels have recovered. Ratios for 5-year debt have recovered the most as it dropped to about 60.77% as of Friday after reaching as high as 650% versus treasuries back in March. This steep drop can be associated with the Fed indicating they plan to keep interest rates low well into 2022 as well as a strong demand for both tax exempt and taxable municipal debt.

Municipal Supply: Supply for the week will pick up as the negotiated calendar will total around $7 billion. The largest deals for the week will be the $1.5 billion New Jersey Transportation Trust Fund followed by the $500.0 million Illinois State Toll Highway Authority issue, and the $493.0 million New York City Municipal Water Finance Authority where AmeriVet will be part of the syndicate. AmeriVet will also be part of the syndicate for the $483.0 million New York State Housing Finance Authority.