New Quarter, New Opportunities

It’s time to rake in the value!

Macro Update:

• Equity YTD: Dow +8.70%, S&P +12.96%, Nasdaq +16.43% ; minor pullback last week

• US Corps: 1.25T ytd, last week 50B, led by 5-part Oracle 18B deal BAA2/BBB which saw 88B in orders!

• Taxable Credit: HY +266 and IG +74 (near all-time tights)

• Gold: 3,800 new record, same for Household Net Worth = $180 Trillion

• Data: Supposed to be the Week of Weak Job data, may not get any if gov’t shutdown continues but Core PCE Friday was 2.90%

• The Fed cut by 25bp (4.00–4.25% target range) in an 11-1 vote

• Dot plot and futures imply another 50bp in cuts this year.

• Powell noted a slowing labor market (softened demand, immigration-related slowdown), but retail sales remain strong.
  

Muni Insights:

• Municipals outperformed UST’s in September, although momentum slowed into month-end.

• Performance led by high-quality credits, while BBBs and HY lagged.

• YTD issuance stands at ~$452B

• Next week’s calendar looks heavier ($16bn+ expected)

• Secondary trading volume was $52B last week, one-year weekly average is ~$45B

• Weekly inflows slowed to ~$1B vs. $2.1B prior week. YTD flows: $28.6B total ($7.9B mutual funds, $20.7B ETFs).
  

Credit Considerations (Riverbend avoiding):

• Healthcare: Rural/single-site hospitals vulnerable to Medicaid cuts.

• Higher Ed: Smaller liberal arts colleges face demographic headwinds and funding strain.

• Chicago credits underperformed in September, widening relative to benchmarks.

• Appropriated debt
  

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!