Buy side

Investors may want to consider non-disclosure of climate hazards as a symbol of non-resilient projects and limited planning.

Household ownership of munis — which includes direct ownership of individual bonds in brokerage accounts, fee-based advisory accounts and SMAs — rose to $1.779 trillion, up 0.3% from Q4 2023 and from 5.6% in Q1 2023.

"It is important to remember that as long as the Fed's next move is to lower policy rates, bonds will do well," said Jack McIntyre, portfolio manager at Brandywine Global. "The employment market is in better balance, which is very important for the Fed — even more than inflation."

Driven by ongoing capital expenditure funding and current refunding opportunities, airport issuance is estimated at $21 billion in 2024, with a slew of from June through September and more planned in December, according to Ramirez.

USTs spiked 17 basis points on the short end and 15 to 12 10-years and out following the release, while triple-A curves saw yields rise two to five basis points, depending on the yield curve, in a more muted and typical reaction for the asset class.

As the public finance landscape evolves with increased philanthropic interest and a focus on climate resilience and community health, it's time for traditional market participants to align their investments with impactful outcomes to drive systemic change and foster equitable growth.

"The shortage of accountants is not a brand new-issue, but it seems to be more thematic this year," said Richard Ciccarone, president emeritus of Merritt Research Services.

Municipal bond mutual funds saw inflows as investors added $549.2 million after $94.9 million of outflows the week prior, according to LSEG Lipper.

Falling occupancy figures, staffing shortages, and rising labor costs have elevated the sector's risk, with Greenwich Investment Management's bankruptcy yet another example of how the sector requires thorough credit analysis.

While particpants expect some pressure in the near-term with more than $16 billion on tap, they also say the current yield and ratio levels offer investors opportunity.

May volume "surprised on the high end and it has been one of the fastest starts to the year historically," said James Pruskowski, chief investment officer at 16Rock Asset Management.

Despite losses, munis are "being set up nicely" as the summer season approaches, said Jeff Lipton, a research analyst and market strategist.

SMA growth has been "pretty staggering to see," said Matthew Schrager, managing director and co-head of TD Securities Automated Trading, noting the "interplay between SMA and electronic trading is a very symbiotic relationship."

Marty Mannion and Matt Schrager, managing directors and co-heads at TD Securities Automated trading division, discuss how automation and electronic trading are creating more opportunities and better outcomes for municipal market participants, including making muni bonds more accessible to a broader range of investors.

Municipal bond mutual funds saw the second week of outflows as investors pulled $217.6 million from the funds after $546.2 million of outflows the week prior, according to LSEG Lipper. High-yield saw inflows again.

Palm Beach County residents are using a Florida law passed last year aimed at ESG investing to challenge its county's investment in Israel bonds.

More than two dozen issuers have announced plans to refund their BABs this year, despite objections from investors.

The steady demand for municipal bonds in high-risk areas underscores the complex relationship between climate change and financial markets.

Mayor Brandon Johnson and Chicago's finance team talked up the Windy City's economy and talked up bond sale plans at an event for municipal bond investors.

"The industry is built on relationships, and it's powered by technology," said Josh Rosenblum, head of algorithmic trading at Brownstone.