Markets

"Investor reception will remain the ultimate arbiter of muni performance and … the current state of the tax-exempt space to be well-positioned, even though munis are likely to continue to underperform USTs," said Jeff Lipton, a research analyst and market strategist.

Clyde, Texas, missed payments on certificates of participation due Aug. 1, the same day it declared a water emergency. Bond insurers are paying the holders.

In this episode, Howard Cure, Director of Municipal Bond Research at Evercore Wealth Management, discusses the improving state of public pensions, the ongoing challenges faced by states like New Jersey and Illinois, and the risks associated with pension obligation bonds.

At $1.8 billion, the tax-exempt and taxable deal is the largest on the calendar this week and it's the latest offering from the city since a $1.2 billion refunding issuance in July. 

As investors contemplate rate policy for the remainder of 2024, "there have been a few strategies from which to choose to boost yield — short positioning, curve extension and credit quality," noted Kim Olsan, senior fixed-income portfolio manager at NewSquare Capital.

Pent-up demand, dwindling federal aid and lower interest rates led to a 32% increase in municipal issuance in the first half of 2024.

New sales of tax-exempt bonds in California have been gobbled up by buyers looking to shield income from the state's high taxes and to lock in yields.

Municipal bond insurers wrapped $18.592 billion in the first half of 2024, a 19.5% increase from the $15.561 billion insured in the first half of 2023, according to LSEG data.

New York state's issuers topped the Northeast charts as issuance rose in nearly every sector of the market during the first half of 2024.

Barclays rate strategists believe the 10-year part of the Treasury curve has room to cheapen. "In that case, tax-exempts will likely not only follow, but underperform."