9/3/2020 Market Commentary
- September 3, 2020
Despite the ongoing stock market rally, municipal bond yields held constant for the most part over the past week.
Municipal Bond Yields This Past Week
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| August 28, 2020 | 0.81% | 1.56% |
| September 2, 2020 | 0.83% | 1.57% |
| Change (bps) | +2 | +1 |
Treasury yields on the other hand, pushed lower throughout the week. The Fed’s announcement last week of its easy-money policy moving forward strengthened treasuries, especially on the long end.
The stock market continued to rally, led by tech stocks.
- The low rates expected over the next several years from the Fed’s recently announced policy caused bank stocks to dip. However, the strong performance of tech stocks pushed the S&P 500 to record highs.
- Investors are anticipating the flood of cash unleashed by central banks will make its way to equities.
- US Jobs report on Friday is forecasted to show payrolls continue to rebound in August from virus lows.
August supply came in at $41 billion, marking the third straight month above $40 billion.
- August 2020 volume was strong. It is the second strongest August over the last ten years (beat by August 2016).
- 30% of the August primary market supply was taxable. The investor audience for taxable municipals has grown, as institutional buyers have shown more interest.
- Despite the strong month, it is still a drop in volume compared to the two most recent months. The enormous volume in June and July reflected backlogs from the spring when there was more market uncertainty. That backlog has now been accounted for. Additionally, the second half of August saw increases in yields, which gave some issuers pause.
- $8.5 billion is expected to come to market this week.
- September may see another above-average month of supply, as some issuers will rush to market ahead of the election.
Rick Brandis
Title:Managing Director
Nicki Tallman
Title:Managing Director
Disclaimer
All materials, including proposed terms and conditions, are indicative and for discussion purposes only. Finalized terms and conditions are subject to further discussion and negotiation and will be evidenced by a formal agreement. Opinions expressed are our present opinions only and are subject to change without further notice. The information contained herein is confidential. By accepting this information, the recipient agrees that it will, and it will cause its directors, partners, officers, employees and representatives to use the information only to evaluate its potential interest in the strategies described herein and for no other purpose and will not divulge any such information to any other party. Any reproduction of this information, in whole or in part, is prohibited. Except in so far as required to do so to comply with applicable law or regulation, express or implied, no warranty whatsoever, including but not limited to, warranties as to quality, accuracy, performance, timeliness, continued availability or completeness of any information contained herein is made. Opinions expressed herein are current opinions only as of the date indicated. Any historical price(s) or value(s) are also only as of the date indicated. We are under no obligation to update opinions or other information.
The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. Oppenheimer does not provide accounting, tax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and or counsel. The materials should not be relied upon for the maintenance of your books and records or for any tax, accounting, legal or other purposes. In addition, we mutually agree that, subject to applicable law, you may disclose any and all aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, without Oppenheimer imposing any limitation of any kind.
Oppenheimer shall have no liability, contingent or otherwise, to the user or to third parties, or any responsibility whatsoever, for the correctness, quality, accuracy, timeliness, pricing, reliability, performance or completeness of the data or formulae provided herein or for any other aspect of the performance of this material. In no event will Oppenheimer be liable for any special, indirect, incidental or consequential damages which may be incurred or experienced on account of the user using the data provided herein or this material, even if Oppenheimer has been advised of the possibility of such damages. Oppenheimer will have no responsibility to inform the user of any difficulties experienced by Oppenheimer or third parties with respect to the use of the material or to take any action in connection therewith. The fact that Oppenheimer has made the materials or any other materials available to you constitutes neither a recommendation that you enter into or maintain a particular transaction or position nor a representation that any transaction is suitable or appropriate for you.
© 2020 Oppenheimer & Co. Inc. Transacts Business on All Principal Exchanges and Member SIPC. All rights reserved. No part of this presentation may be reproduced in any manner without the written permission of Oppenheimer. Oppenheimer & Co. Inc., including any of its affiliates, officers or employees, does not provide legal or tax advice. Investors should consult with their tax advisor regarding the suitability of Municipal Securities in their portfolio.
Technology, Media & Communications
Warrant Financing
Financial Advisor
See All Transaction