Markets

Moody's Investors Service Tuesday repeated a threat to downgrade the United States sovereign debt rating.

The recent Berkshire Hathaway trade, sound technicals and a recent industry move to standardize contracts might increase interest in muni credit default swaps, which has suffered from apathy on the part of investors and a lack of price volatility to attract traders.

After plunging during the financial crisis, the issuance of municipal bonds subject to the alternative minimum tax is slowly rebounding, with airports leading the way.

The municipal market outperformed the Treasury market on this sluggish holiday week by largely recording less significant backups in yields. Muni bond indexes were mixed, though mostly higher.

Flows into municipal bond mutual funds remained positive. Barely. Those funds that report their flows weekly saw $260 million of inflows for the week ended Sept. 5.

Tax-exempt money market funds lost $1.70 billion and total net assets declined to $268.31 billion in the week ended Sept. 3 -- the second consecutive week of significant losses, according to The Money Fund Report, a service of iMoneyNet.com.

This week will be short on days and, yet again, slight of issuance for the municipal bond market. Industry calculations hold that muni bonds expected to be sold this week should total $1.89 billion, versus a revised $2.18 billion million last week.

Long-term municipal bond volume last month easily outstripped that of the same period in a relatively issuance-starved August 2011.

Van Eck Global will soon unveil an addition to its current municipal exchange-traded fund line-up, as the firm has filed with the Securities & Exchange Commission to launch the Market Vectors Short High-Yield Municipal Index ETF.