NEW YORK – Last-minute buyers are leading the tax-exempt market on Thanksgiving Eve, as the market is expected to quiet down by afternoon.
“Out of the chute we are busy,” said a trader in New York. “There are buyers out there.”
Munis were mostly steady, according to the Municipal Market Data scale. All yields were flat except for yields on the five- to six-year range which moved one basis point lower.
On Tuesday, the two-year muni yield closed flat at 0.42% for its 15th consecutive trading session. The 30-year yield finished flat at 3.75%. The 10-year yield fell one basis point to 2.22%.
Treasuries were weaker on the short end of the curve and steady futher out. The two-year yield rose one basis point to 0.28% and the benchmark 10-year yield rose two basis points to 1.95%. The 30-year was flat at 2.90%.
The primary market is seeing no action, but the secondary market is getting some activity.
Bonds from an interdealer trade of Fulton County, Ga., water and sewer revenue 5s of 2023 yielded 2.95%, three basis points lower than where they traded Tuesday.
Bonds from an interdealer trade of New Jersey Transportation Trust Fund Auth 5s of 2042 yielded 2.88%, two basis points lower than where they traded Tuesday.
Bonds from an interdealer trade of California Health Facilities Financing Authority 5s of 2039 yielded 5.10%, two basis points lower than where they traded Monday.
In economic news, new manufactured goods orders fell $1.4 billion or 0.7% to $197.7 billion, according to the Commerce Department. This was the second decline in two months following September’s 1.5% drop.
“The month-to-month volatility in durable goods orders makes it very difficult to judge short-term trends in manufacturing order books,” said economists at RDQ Economics. “None of this has a recessionary feel to it but neither does it portend a robustly growing manufacturing sector. We expect a mini-restocking cycle to give a boost to manufacturing growth in the coming months.”
In other economic news, person income rose $48.1 billion or 0.4% in October, the largest increase since March, the Commerce Department said. The gain follows a 0.1% increase in September.
“We are surprised by the very modest nature of the increase in spending in October given reported data on retail sales and vehicle sales,” wrote RDQ economists. “Given the reported inventory liquidation for the third quarter, we remain comfortable with our projection for 3% real GDP growth in the fourth quarter.”
Initial jobless claims increased 2,000 to 393,000 on a seasonally adjusted basis for the week ending Nov. 19, the Labor Department said. Continuing claims rose to 3.691 million for the week ending Nov. 12 from 3.623 million the week before.
Economists expected 390,000 initial claims and 3.60 million continuing claims, according to the median estimate from Thomson Reuters.
“The initial jobless claims data continued to trend lower and we are encouraged that the four-week average of claims has remained below the 400,000 mark for two consecutive weeks,” wrote RDQ economists. “Bigger picture, we judge the jobless claims data as corroborating our view that the pace of growth has strengthened in the fourth quarter.”
