Markets

LSEG Lipper reported Thursday that investors added $210.6 million to municipal bond mutual funds for the week ending Wednesday — the third consecutive week — after inflows of $898 million the week prior.

The ratings agency cited federal support and military spending on the island as keys to its decision.

As ridership remains low, investors are closely watching for new funding streams and credits like the MTA's planned congestion tax-backed bonds.

Inflation and mandate pressures are key factors that moved the outlook lower.

Despite fixed-income seeing losses this month, Jeff Lipton, managing director of credit research at Oppenheimer, believes "a performance sea change is nearing."

The trend toward paying down debt, as opposed to tender offers or refundings, to save money cuts across Red state/Blue state lines. New Jersey retired $500 million of debt to produce $160 million of savings.

After the year-end rally, "2024 bond investors have been reluctant buyers, prices creeping lower perhaps until the data and the Fed's next steps are more clear," said Matt Fabian, partner at Municipal Market Analytics.

Brightline, a high-profile name in the speculative muni market, is set to come to market next week to remarket $675 million of 2020 bonds.

This week's heavy new-issue calendar of tax-exempt supply "could lead to a modest cheapening of ratios," said Vikram Rai, head of municipal markets strategy at Wells Fargo.

Moody's Investors Service bumped Chicago's outlook to positive from stable, while affirming the city's Baa3 issuer and general obligation bond ratings.