Primary bond market

Following the September/October rally, munis have been relatively steady in November and December, with direction and magnitude of rate change in the UST market driving underperformance or outperformance, said J.P. Morgan strategists led by Peter DeGroot.

Supply for the final two weeks of the year will be virtually nonexistent, with only one deal, $24.46 million of taxable multi-family/project bonds from the Colorado Housing and Finance Authority, on the calendar for next week.

The Equitable School Revolving Fund, which has more deals in the works, has maintained its strong credit profile even as the sector has experienced headwinds.

Muni yields were bumped a basis point, while UST yields fell two to four basis points.

"Once this week is done, that's it for the year. The following week is Christmas, and then after that, the new year," said Jeff Timlin, a partner at Sage Advisory.

The Ohio State University went to market Tuesday with a $560 million deal to refund taxable Build America Bonds into tax-exempt debt.

Inflation reports may drive markets in 2026 since the labor market is "sending mixed messages," said Kevin O'Neil, associate portfolio manager and senior research analyst at Brandywine Global.

Next year, the "muni market could see stable to improving returns depending on yield curve positioning, with better performance possible at the long end of the curve," said Jonathan Rocafort, managing director and head of fixed income solutions at Parametric.

The New York City Transitional Finance Authority leads the new-issue calendar with $2 billion of future tax-secured subordinate refunding bonds.

The well-regarded pediatric hospital system is not alone in facing downgrades amid the myriad challenges healthcare has experienced in recent years.

The final judgment in the case was filed Dec. 10 in the U.S. District Court for the Southern District of New York.

Both Janney and Huntington are among the top 30 underwriters in the muni market and are neck in neck.

Pasadena and the Rose Bowl Operating Co. are suing UCLA, saying plans to relocate football games to SoFi stadium could jeopardize $130 million in revenue bonds.

"With its third straight rate cut, the Fed is sending a clear message: it's no longer just watching inflation — it's managing risk," said Gina Bolvin, president of Bolvin Wealth Management Group.

The bonds are to be used for a variety of projects aimed at recovering from multiple natural disasters that struck Lake Charles in 2020 and 2021.

Muni yields were little changed, and have barely moved over the past several trading sessions, said Kim Olsan, senior fixed income portfolio manager at NewSquare.

Municipal bond supply projections for next year range from a high of $750-plus billion to a low of $520 billion, with most firms expecting issuance to hover around $600 billion, easily surpassing 2025's record.

Omaha Public Power District will go to market the week of Jan. 5 with about $164 million of Series 2026A separate electric system revenue refunding bonds.

While muni returns moved lower last week, year-to-date returns still hover around 4%, said Jason Wong, vice president of municipals at AmeriVet Securities.

Issuers mostly avoided pricing deals in the previous weeks the Fed met this year, but that's not the case this week, said Pat Luby, head of municipal strategy at CreditSights, and Wilson Lees, an analyst at the firm.