Stocks Open, Bond Market Closed—Munis Never Sleep

Macro Update

  • Equity: (wk pts, wk, ytd): Dow -1,278pts, -2.73%, +6.90%; S&P -163pts, -2.43%, +11.41%; Nasdaq -577pts, -2.53%, +14.98%

    • Tensions with China over rare earth minerals and new tariff level talk. This POTUS likes rare earth minerals… probably a reason Tech likes the POTUS

  • USTs: Well bid Friday, 2yr 3.53%, 10yr 4.06%, 30yr 4.64%. Yields down 3-8bps on week (longer rates fell more)

  • Tax-Free Rates: Increase on front end, still adjusting to way over-valued conditions. Longer rates fell 3-5bps.

  • Econ Data: Limited due to government shutdown; University of Michigan data has never been so popular (all unchanged); CPI due 10/15 will be ready on 10/24 per the Bureau of Labor Statistics

    • Seems labor demand is slowing proportionally to labor force growth and with inflation above the 2% target for long enough… the real target may be 3%

Muni Insights

  • Supply: Bring it! $77B and 7,625 deals = +13% vs last years’ record; $13B this short week ($4B taxable munis, they have been rich!)

  • Curve: Longer bond performance in the 4th, picking up where it left off in the 3rd... well bid by most participants (Funds/ETFs/Institutions/SMAs)

  • Credit: Simply safest to buy those standing on their own accord, Federal monies at best will be slowing

  • Rolldown: The 4th quarter always brings talk of the “rolldown”…one of Riverbend’s favorites as well, the benefits of aging. Let’s discuss!

Looking Ahead

Municipals continue to offer an attractive combo of safety, diversification, and tax-advantaged yield. Active management remains critical, especially as issuance picks up and credit pressures emerge in select sectors.

Let’s talk!

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New Quarter, New Opportunities