Buy side

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.

Municipal bond mutual funds saw inflows as investors added $528.7 million to funds after $674.1 million of inflows the week prior, according to LSEG Lipper. This marks seven straight weeks of inflows.

Underwriting spreads rose to $7.11 in the first half of 2024 from $3.70 in the first half of 2023.

The Investment Company Institute reported $839 million of inflows into municipal bond mutual funds for the week ending Aug. 7 after $442 million of outflows the week prior. Exchange-traded funds saw $680 million of inflows after $950 million of inflows the previous week.

"There's an important 'date certain' the market may overreact to, but by and large, [this] week is looking positive given a lighter new- issue calendar," said AllianceBernstein strategists.

A new classification scheme would allow market participants, both on the buy and sell sides, to correctly identify the source and nature of credit risk in their holdings and to aggregate such risk into meaningful sectors that share common risk drivers.

"After a long-period of muni yields not being that attractive relative to corporates, that's starting to shift," Charles Schwab's Cooper Howard said.

Muni returns so far in August are in the black, with the Bloomberg Municipal Index at 0.53% this month and 1.04% year to date. High-yield continues to outperform with returns at 0.68% in August and 5.99% in 2024.

In an environment characterized by dwindling enrollment, slowing revenues, and the end of COVID-19 federal aid, small private universities are struggling to remain afloat.