MuniNet Guide Archive
Muni Supply Returns amid Favorable Market Technicals
The bond market’s enthusiastic response to the unexpectedly weak December employment report is starting to wane as more recent economic releases continue to point to strong growth in the fourth quarter of 2013. As a case in point, December retail sales were reported...
Munis off to a Good Start, Even as Employment Number Confounds
The jobs data giveth and the jobs data taketh away. Once again, the closely-watched monthly indicator of employment growth in the US caught all market observers leaning the wrong way. As shocking as the November number was on the high side, the December report turned...
The Case for Continued Tax Exemption of Muni Bonds
As Congress debates the future of tax exemption for municipal bond interest, one industry professional says it’s time for those whom it will directly affect - state and local government officials, taxpayers and citizens - to speak up. In a recent report entitled, “A...
A Frigid Start to the Year, but the Heat’s on Puerto Rico Again
Barely a week into the New Year, the biggest market story so far has been the weather, starting with last weekend’s snowstorm in the Northeast and continuing with the deep freeze currently gripping the eastern half of the country. The financial markets are also starting the year on a frigid note. Plus, what would the New Year be without more negative headlines on Puerto Rico?
Puerto Rico Set to Gamble on Market Access
If the first two trading days of 2014 are any indication, credit concerns will continue to weigh heavily on the tax-exempt market. Perhaps more importantly, the industry’s regulators are now also keenly aware of the changing credit landscape in munis. Already, the new...
Risks and Opportunities in Munis in 2014
As we close out an extremely eventful year in the municipal market, let’s indulge in a little crystal ball exercise and try to see what the New Year has in store for us. For muni investors, 2014 should bring a fresh mix of risks and opportunities. It’s fair to say...
Positioning Your Muni Portfolio for 2014
Talk about a volatile year. It’s hard to believe that, less than three months ago, the incipient US recovery was pronounced doomed by the dysfunctional political process in Washington D.C. Against the backdrop of a Federal government shutdown and a looming political...
The Fed Tapers and Munis Waver
And so it begins. Taking a cue from the financial markets’ calmer behavior in recent weeks, the Federal Reserve Open Market Committee (FOMC) ended months of speculation by announcing it will start to reduce its bond purchase program to $75 billion from $85 billion a...
Don’t Look Now, but the Muni Industry Is Changing
Over the past year, we’ve been fortunate enough to have interacted with an astonishing array of tech entrepreneurs and market veterans, many with pioneering visions on how to improve the municipal bond market. The good news: change is coming to the tax-exempt sector. Why now? In our view, the potential catalysts for change include: (1) the end of the great bull market in bonds; (2) the new regulatory environment under Dodd-Frank; and (3) advances in information and trading technology.
As Airlines Merge, Public Airports Stand to Gain – Or Lose
How do mergers among commercial airlines impact public airports - and their credit quality? As US Airways and American Airlines officially tie the knot in a merger that will result in the “New American,” how the combined airline organizes its route network carries...
The Divergent Fortunes of Illinois and Puerto Rico
It’s Friday the 13th and not too many bond investors are feeling lucky this morning. Except for an always unpredictable weekly jobless claims number, most of the recent economic data has come in stronger than expected. November retail sales rose 0.7%, following a 0.6%...
Year-End Muni Supply Surges as Volcker Rule Takes Effect
“A long, long time ago I can still remember how “prop trading” used to make me smile And I knew if I had my chance That I could make those clients pay And maybe I’d be happy for a while” With all due apologies to Don McLean, today may soon be known as “the day the...
Global Demographics Point to “American Century”
Investors are taking a second look at the United States. Because compared to former international favorites like Japan, China, and Europe, the U.S. is posting strong population growth. This increase is the result of both a higher birth rate as well as a remarkable immigration trend. The productivity that investors had already noticed about the American economy is now being matched by consistent long-term internal demand.
A Watershed Week in Munis
Market Outlook This morning’s stronger-than-expected payrolls number for November (203,000 versus the Street consensus of 185,000, with the jobless rate dipping to 7.0%) capped a week of generally positive economic data. The average work week rose to 34.5 hours and...
All Eyes on Illinois and Detroit
Market Outlook Fixed-income investors returned from the holiday week with a rather defensive mindset. Although “Black Thursday/Friday” sales have been middling at best, most other economic indicators have shown surprising strength. Domestic car sales, for one, are...
What to Be Thankful for in Munis
With virtually no new issue supply to speak of this holiday week and relative stability on the rate front, this might be a good time to take stock of everything that’s happened in the muni market this year. And there certainly hasn’t been much to be thankful for. By...
A Historic Muni Bankruptcy Comes To a Close … For Now
Market Outlook The bond market was looking for bad news this week and found it in the minutes of the FOMC, released on Wednesday. Apparently, tapering has remained on the table, which really shouldn’t surprise anyone. However, the Committee did leave the door open for...
State and Local Public Pension Plans: Is the Crisis Over – or Has it Just Begun?
Very few state and local public pension plans have earned bragging rights for their performance over the past year, and others have climbed deeper into the danger zone. Overall, state and local pension funds saw little improvement during the 2012 fiscal year,...
JeffCo Joins Puerto Rico in Dubious Investment Grade Category
Market Outlook The week is starting out on a quiet note as the market looks forward to tomorrow’s inflation, consumption and housing data. The CPI data in particular is expected to remain constructive. With Janet Yellen’s confirmation vote scheduled for later in the...
Seeking Salvation in High Yield Munis
Market Outlook Janet Yellen’s confirmation hearings went swimmingly yesterday, allowing 10-year Treasury yields to rally to around 2.70%. Municipals also rallied in tandem, with yields on the long end declining by three basis points. Meanwhile, flows into tax-exempt...
Can Municipal Marketing Help Save Your City?
Cash-strapped cities, take note: An untapped source of revenue may be right under your nose. Many private sector businesses are ready and willing to guarantee public funding in exchange for access to public sector assets. The concept of municipal marketing is “as old...
Do Hedge Funds Belong in the Municipal Market?
Market Outlook Traders returning from the Veterans Day holiday are facing a much weaker tone in fixed income as the market continues to digest the implications of last Friday’s blowout employment report. The yields on the benchmark 10-year and 30-year Treasury bonds...
Decoding Economic Indicators Can Help Assess Municipal Credit Quality
Guest commentary by Christopher Mier, Chief Strategist and Economist, Loop Capital Markets We enter the final two months of 2013 with greater uncertainty about the strength of the economy than we have had all year. Given the budget and debt ceiling re-do scheduled for...
Credit Concerns Overhang the Latest Muni Industry Conference
Market Outlook Financial markets have a way of not letting you get too comfortable. Going into this morning’s delayed October employment report, all markets, both equities and fixed-income, were priced for a very weak number (in the 120,000 range), and no Fed taper...
High Yield Muni Supply Perks Up
Market Outlook It’s Election Day and voters around the country will have a say on some key issues with potential impact on municipal creditworthiness. Two gubernatorial elections, in New Jersey and Virginia, will be closely watched by media pundits for their potential...