Finance

Muni yields rose up to eight basis points, depending on the scale, with the largest losses again on the front-end of the curve.

The short-end correction has been "driven by a solid labor market report, which pushed Treasury yields higher as expectations for additional Fed rate cuts tempered," said Alice Cheng, director of municipal credit and investor strategy at Janney.

S&P Global Ratings cut the Toms River Regional School District to A-minus from A, ending a negative CreditWatch but assigning a negative outlook.

Federal Reserve Bank of Kansas City President Jeff Schmid said that the central bank should continue its focus on curbing inflation, as the job market is "largely in balance."

S&P Global Ratings warned that Indiana's property tax reform law, Senate Enrolled Act 1, creates uncertainty for local income tax-backed debt.

Retail offerings from California and Connecticut led the market Wednesday.

It affirmed the California city's Aaa issuer rating, but cited the drag on revenues from tepid tourism numbers and liabilities from child sexual abuse claims.

Secondary selling pressure and the larger calendar weighed on the market Tuesday.

Chicago is returning to market with a $375 million deal for O'Hare Airport, according to multiple rating reports, with more on the way.

The outlook revision to negative for the Texas Biomedical Research Institute cited weakened liquidity and reliance on federal grants, the rating agency said.

"On a month-to-date basis, AAA munis have outperformed Treasuries across the entire curve. … This outperformance can be attributable to an improvement in market technicals," said Daryl Clements, a portfolio manager at AllianceBernstein.

The college's most recent annual comprehensive financial report is for the fiscal year ending June 30, 2023, and S&P is concerned by the lack of timely reporting.

Munis have outperformed USTs and corporates by more than 1.0% month-to-date on the heels of this rally so far, BofA strategists said.

Munis saw cuts, albeit small ones, for the first time in nearly two weeks as yields rose up to four basis points, depending on the scale.

The rating agency cited New Jersey's "robust budgetary surplus" while continuing to make actuarially based pension contributions.

By the close, muni yields were bumped up to four basis points, depending on the curve, while UST yields rose two to five basis points.

Walter O'Connor's decades-long tenure as a municipal bond portfolio manager at BlackRock will come to an end next year. 

As the "slope of the municipal yield curve remains extremely steep and long bonds are cheap relative to U.S. Treasuries," Daryl Clements, a portfolio manager at AllianceBernstein, predicts "long municipal bonds have a long way to go until they are considered fair value."

"This was a much-needed rally as the long end struggled throughout the year, but now has been pushed back into positive territory," said Jason Wong, vice president of municipals at AmeriVet Securities.

Cook County, Illinois, plans to go to market Oct. 1 with $150 million of sales tax revenue bonds. The deal comes on the heels of a Moody's upgrade to Aa3.