Primary bond market

"As September draws to a close, some dynamics may prevail in October but others could undergo a shift," said NewSquare Capital's Kim Olsan. "One aspect that will continue is the level of supply coming to market." 

September volume came in over $44 billion leading volume year-to-date to hit more than $380 billion, just shy of 2023's full-year total issuance.

Bonds will finance construction of the South Coast Rail Project, which will restore commuter rail service between Boston and southeastern Massachusetts.

Municipal triple-A yield curves closed out the week with few changes, valuations were little changed, but at attractive levels, and the forward calendar climbs to more than $10 billion to open the fourth quarter.

Minneapolis will sell $123.6 million of Series 2024 general obligation bonds via competitive sale on Tuesday, buoyed by triple-A bond ratings.

High-yield muni issuance totals $20 billion year-to-date, "reflecting normalization from relatively depressed levels in 2023 ($7.6 billion over the comparable period), and now virtually equal to the trailing five-year average for the period ($20.1 billion)," said J.P. Morgan strategists, led by Peter DeGroot.

Matthew McQueen, Head of Municipal Banking and Markets and Global Mortgages within the Global Markets business at Bank of America, sits down with Bond Buyer Executive Editor Lynne Funk to talk about getting deals done amid an uncertain global macroeconomic landscape.

The Investment Company Institute reported $1.329 billion of inflows into municipal bond mutual funds for the week ending Sept. 18 after $1.402 billion of inflows the week prior. Exchange-traded funds saw $55 million of inflows after $1.048 billion of inflows the previous week.

Demand for munis looks "fairly stable" for now, particularly after the 10- to 25-basis-point rally ended in the 30 days before the Federal Reserve cut rates last week, Municipal Market Analytics, Inc. said, noting the "bull-steepening adjustment" looks like the 30-day move before the beginning of the Fed's last cutting cycle, at the end of July 2019.

S&P Global Ratings placed more than 400 state and local government issuers under criteria observation as the agency adopts an updated rating methodology.

Water agencies in Texas, Oklahoma, and Denver are selling a combined nearly $2 billion of triple-A-rated bonds this week.

NYPA's green designation and two credit upgrades are drawing lots of attention in a crowded market.

Several factors make the current market "an attractive entry point" into the muni market, AllianceBernstein strategists said. For one, municipal valuations are cheap to fair value relative to U.S. Treasuries, partially due to the surge of supply in 2024.

The Los Angeles Unified School District bonds carry a sustainability label with a third party opinion from Kestrel.

"Active ETFs are becoming an integral part of investor portfolios around the world, with financial advisors increasingly incorporating them into their models-based practice," a BlackRock spokesperson said.

As Erie County sells general obligation bonds to fund its new stadium for the Buffalo Bills, the deal team is targeting a new market: fans of the NFL team. 

"Should September's positive returns hold as we expect, it would mark the fourth consecutive month of positive total returns — the first such period since the five-month period spanning from March through July 2021," BofA strategists Yingchen Li and Ian Rogow said.

While the municipal market barely budged following the Fed's decision to cut rates 50 basis points, Thursday saw muni yields rise up to two basis points, depending on the scale, but still lagged the weakness in USTs. LSEG Lipper reported $716 million of inflows into municipal bond mutual funds.

The record pace of municipal bond supply this year is driven in part by cities and states realizing projects won't get any cheaper if they wait.

The ratio of local government municipal debt to GDP in aggregate has fallen to around 10% from 20% in 2010.