Economic indicators

Yields have fallen over the past few weeks, so "any decent excuse that rates move up a little bit after that big rally" may have occurred as the market digested the report — which was a "little bit of a mixed bag" — after the initial headline figure, said Jeff MacDonald, EVP and head of fixed income at Fiduciary Trust International.

Municipals largely stayed in their own lane Wednesday, digesting the large slate of new issues as supply dwindles heading into election week, with Bond Buyer 30-day visible supply falling to $5.56 billion.

"The numbers are weak, but not cusp of recession weak," Chris Low, chief economist at FHN Financial, said.

Interest rate risk, stagnant bond volume, loss of revenue and a looming presidential election top the industry's concerns for 2024.

Florida outpaced the national average in overall labor force gains last month while the state's 2.8% unemployment rate was lower than the nation's 3.9% in October.

If Treasury rates become "more stabilized," it provides "a good reason to be somewhat constructive on munis for a while," BofA Global Research said in a report.

"Despite the breathtaking selloff in longer rates, Barclays' macro strategists see no clear catalyst to stem the bleeding," Barclays strategists said. "Data are unlikely to weaken quickly or enough to help bonds."

The state managed to grow revenues above forecast for the first two months of the fiscal year despite the delayed tax filing deadline.

The Miami metro area unemployment rate declined to 1.9% from the 2.9% reported in August 2022.

There hasn't been a huge return of capital in the muni market so far this year, with fund flows being rather anemic, said Chad Farrington, co-head of municipal bond strategy at DWS Group.