Finance

Mohammed Murad, head of credit research for PT Asset Management, said the ceasefire extension "possibly offers less clues as to what a permanent resolution may look like."

It's difficult to tell whether the markets were more affected by spiking oil prices, eroding peace talks between the United States and Iran, or Kevin Warsh's hawkish comments during his confirmation hearing to chair the Federal Reserve, said James Pruskowski, managing director at Hennion & Walsh.

The Texas city's latest projection for the onset of a Level 1 emergency comes as water woes spurred rating downgrades and negative outlooks since last fall.

Market support for taxables, particularly those from active issuers, remains firm. Taxables are seeing gains of 1.08% year-to-date, or 50 basis points above a UST index gain, said Kim Olsan, senior fixed income portfolio manager at NewSquare Capital.

The market is experiencing a "calm before a potential storm," said Chris Brigati, managing director and CIO at SWBC.

Two rating agencies dropped their Los Angeles Unified School District outlook to negative from stable.

"Ceasefire optimism augmented by a liquidity-driven risk-on macro market environment should be neutral for duration and positive for credit spreads," BofA analysts wrote.

The two-week ceasefire with Iran comes to an end Wednesday, though President Donald Trump said Thursday at an event in Las Vegas the war should be ending soon.

The rating agency's previous review of the Texas city resulted in downgrades in December over increased credit risk due to water supply woes.

News of a 10-day ceasefire between Israel and Lebanon may have reassured investors, said James Pruskowski, managing director at Hennion & Walsh, but it didn't cause munis to richen.

The rating agency cited the city's sharply diminished liquidity and reserves.

"Some of it is related to the headlines that we're seeing right now, particularly when we think about yields and what we've seen over the last couple of days," said Tim Iltz, fixed-income credit and market analyst at HJ Sims.

The college's closure is the "tip of the higher ed iceberg," said a bond buyer.

Two Southern California school districts received upgrades from Moody's on Tuesday. Another district was affirmed.

The quiet in the muni market is likely due to geopolitical uncertainties, according to Cooper Howard, director of fixed income strategy at Charles Schwab.

The veteran underwriter said he's excited about joining a smaller, more focused firm, where he can once again expand its competitive bidding capabilities.

Chris Brigati, managing director and CIO at SWBC, said he was "a little underwhelmed" with the market as volumes and flows were lighter than he expected.

With the "fragile" ceasefire in the United States-Iran conflict underway, the risk of higher rates beyond those from March has largely been removed, said BofA strategists.

During the two-week ceasefire anything could still happen and a "blow up" would create significant volatility, said Kevin McGuigan, director at Municipal Market Analytics.

Moody's Ratings cited a substantial fall in unrestricted liquidity for the two-notch downgrade. Moody's also placed the rating on review for another downgrade.