Secondary bond market

Michael Chalker, portfolio manager and senior analyst at LM Capital Group, talks with Chip Barnett about the fixed-income markets and the fallout from the COVID-19 pandemic. (16 minutes)

The Investment Company Institute reported municipal bond funds saw $2.675 billion of inflows in the latest reporting week.

Sources said the JFK deal was massively oversubscribed, allowing underwriters to lower yields from 15 to 45 basis points.

Municipals held firm ahead of this week's new issue slate, which features deals from issuers in New York and Texas. Treasuries weakened as stocks rose on positive coronavirus news.

Municipals continue to rally as market participants get ready to head into a quiet holiday week.

Large blocks of New Jersey paper changed hands with yields that pushed spreads below 100 basis points on some maturities for the recently downgraded state.

A supply/demand imbalance allowed New Jersey and Massachusetts to reprice to lower yields while the beleaguered New York MTA will head back to the Fed for liquidity.

The strong demand amid a dearth of new municipal issuance by states and a reach for yield also allowed New Jersey to skip a planned taxable portion and officials announced it would not need to access the Fed's Municipal Liquidity Facility.

Municipals were steady to stronger ahead of $11.5 billion of supply as requests for new municipal bond identifiers surged almost 40% last month.

Municipals firmed Friday, with yields falling by as much as two basis points, as coronavirus threats grow and a flight-to-safety resumes.