9/11/2020 Market Commentary
For the second straight week, municipal bond yields have seen very little change in rates.
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| September 4, 2020 | 0.83% | 1.57% |
| September 10, 2020 | 0.84% | 1.58% |
| Change (bps) | +1 | +1 |
An estimated $7.1 billion in municipal bond offerings came to market this week. This amount is higher than the year-to-date average, but lower than bond volume in recent weeks.
Treasury yields saw more movement than municipal rates. Treasury yields dropped slightly in reaction to the stock market selloff.
In the days leading up to the holiday weekend, the stock market began selling off, ending a five month rally. The S&P 500 and Nasdaq saw losses four out of the past five days.
- The stock market began selling off on Thursday, September 3rd ahead of the holiday weekend. Losses continued into Tuesday September 8th.
- Investors believed the recent stock rally drove valuation levels too high and began selling in order to lock in profits.
- The stock market rebounded on Wednesday, as investors bought back in at lower prices after the three-day selloff.
- The rebound was short-lived, as the selloff resumed on Thursday.
- Investor caution over the last week can be attributed to:
- U.S. jobless claims coming in slightly higher than expected
- Europe reemerging as a virus hotspot
- Renewed Brexit tensions
- Congress being very far apart on its new relief bill
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