Markets

The growing investor acceptance of taxable municipal bonds over the past year appears to have hit a stumbling block.

Tax-exempt money market funds continued their seesaw between inflows and outflows the week ending July 12, declining $1.89 billion to settle at $352.19 billion in total net assets, according to the Money Fund Report, a service of iMoneyNet.com.

The Bond Buyer’s weekly yield indexes mostly declined this week as the municipal market continued to edge slightly firmer throughout the period.

This year marks the 25th anniversary of The Bond Buyer 40 Municipal Bond Index, a measure of municipal bond values with an interesting and at times inglorious history.

Municipal bond mutual funds last week rebounded from a brief spell of cash leakage with the biggest influx of new money in four months.

A $1.5 billion general obligation bond sale from the Los Angeles Community College District shares the primary market spotlight this week with $900 million of BABs from Illinois, expected to price Wednesday after a two-week delay.

The Bond Buyer’s weekly yield indexes declined during this holiday-shortened week, buoyed mostly by a Wednesday rally of three to five basis points.

Build America Bonds have begun to reshape long-term taxable bond indexes that until now included little state and local government debt.

Tax-exempt money market funds recovered $3.19 billion of cash for the week ending July 5 — more than double their outflows the previous week — ending with $354.08 billion in total assets, according to the Money Fund Report, a service of iMoneyNet.com.