Finance

The rating agency cited narrowing reserves and the expectation that the city will experience declining revenues next year.

The Baa3 rated government will now have more trouble supporting the struggling Guam Memorial Hospital, Moody's Ratings said.

If the shutdown lingers, disruption to key economic data releases could increase market uncertainty, said Tom Kozlik of HilltopSecurities.

Summit Utilities Oklahoma used reserve funds to help cover an Oct. 1 payment on taxable bonds sold in 2022 through the Oklahoma Development Finance Authority.

October has historically not been "particularly kind to the municipal market, as it tends to be one of the heavier supply months of the year," said Daryl Clements, a portfolio manager at AllianceBernstein.

The muni market may be shaken by a government shutdown, driving short-term volatility and wider spreads, said James Pruskowski, a public finance strategist.

Atlanta's airport lost $57 million of funding for the current fiscal year. Other issuers have even more at stake.

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.