Primary bond market

Issuance will "not completely disappear, but will adjust to its seasonal norm from the record-breaking pace of the past several months," said Barclays' Mikhail Foux.

October's "price path has created wider spreads but also brought higher yields that are now in the range where a broader audience may begin to take notice," said NewSquare Capital Senior Fixed Income Portfolio Manager Kim Olsan, noting higher taxable equivalent yields for different tenors of the yield curve.

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.

Nearly $1 billion of outstanding BABs may still be called back before yearend.

California sold tax-exempt and taxable GOs, the University of Miami priced a refunding deal while the Harris County-Houston Sports Authority came with a refunding and tender offer.

The Harris County-Houston Sports Authority's CEO was ousted and its chair faces ouster as it prices a $330 million deal to restructure its bond debt.

While the asset class is still in the red for October, it has pared back earlier losses. The Bloomberg Municipal Index is at negative 1.42% in October and positive 0.84% year to date.

The correction to the municipal market has improved muni to UST ratios while uncertainty hangs over ahead of the election. J.P. Morgan's Peter DeGroot said the firm expects the end of next week "will mark the end of the difficult technical period in 2024 and believe that net supply in November will lead to better valuations broadly in the municipal market."

While fundamentals remain strong — with credit upgrades outpacing downgrades by 3.5 times so far in 2024 — technical factors have been "less supportive," Principal Asset Management strategists said in a report.

"Coming off rich muni-Treasury ratios, the market has swiftly repriced," said 16Rock Asset Management's James Pruskowski. "With now cheaper benchmark yields and wider credit spreads, fresh capital is flowing in, and a strong bottoming opportunity looks to be emerging."