Markets

Tax-exempt money market funds lost nearly half of the robust inflows they accumulated last week, as $2.47 billion of outflows marred the second week of 2014 and reduced total net assets to $272.24 billion in the week ended Jan. 13, according to The Money Fund Report, a service of iMoneyNet.com.

Despite the volatility and uncertainty that saturated the tax-exempt market in 2013, municipal bonds are in high demand at Milwaukee-based Robert W. Baird & Co. due to their attractive risk to reward and overall safety, according to senior vice president B. Craig Elder.

Van Eck Global expanded its line of exchange-traded funds with the debut Tuesday of the Market Vectors Short High Yield Municipal Index ETF, its seventh municipal bond ETF and latest tool for cutting duration and increasing yield potential in a rising interest rate environment.

Standard & Poor's changed its outlook on California to positive from stable based on Gov. Jerry Brown's budget proposal for fiscal year 2015.

A $775 million New York City Transitional Finance Authority offering and a $468 million Minnesota state general fund appropriation bond sale will arrive in the primary market as investors decide how and where to reinvest Jan. 1 coupon payments and redemptions.

Tax-exempt municipal bonds rallied in the first full market week of January, as reinvestment cash hit investor portfolios and government data suggested a sluggish economy.

Municipal bonds remain attractive even after their divergence from Treasuries this past week, industry watchers say, suggesting the recent signs of strength in the market may carry into the new year.

Jefferson County's exit from Chapter 9 bankruptcy sparked interest in general obligation bondholder protections in Alabama, Moody's Investors Service said.

Municipal bond mutual funds recorded their lightest outflows since May 22, when they last registered inflows.

The Bond Buyer's weekly yield indexes slid in the week ended Jan. 9.