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Week In Review


Nonfarm payrolls grew by 228,000 jobs in November.  The unemployment rate was unchanged at 4.1%.  Average hourly earnings rose 0.2%.

Our Take

This month’s report was mixed, as job creation came in better than expected, but the earnings component was weak.  The employment report is unlikely to affect next week’s expected Fed rate hike.


In a breakthrough announcement, Juncker declared that talks around the issues of the breakup bill, the rights of EU citizens residing in the UK, and the Irish border have made sufficient progress to allow negotiations on the future trade relationship between the UK and the EU to begin.  The Irish border issue was resolved by May offering assurances that there would be no need for a border and that Northern Ireland and the rest of the UK would not have any regulatory divergence.

Our Take

It is welcome news that the talks will move on to the post-Brexit trade relationship, as this is the most crucial issue in determining the ultimate impact of Brexit.  However, with 15 months to go before Brexit becomes effective, there is very little time to resolve a very broad range of contentious issues.  Also, May’s assurances on the Irish border do not offer an actual solution that will be acceptable to Ireland, the DUP, and the more pro-Brexit Conservatives, any one of whom could effectively veto a final agreement.


The city of Chicago issued $575 million of taxable and tax exempt bonds this week through the city’s new Sales Tax Securitization Corporation.  The Sales Tax Securitization Corporation was created earlier in 2017 after the Illinois budget took effect.  The budget allows municipalities to issue debt backed by sales tax revenue that the city receives from the state.  The new corporation is rated AA at S&P and AAA at Fitch, and Chicago plans to refinance $3 billion of debt using the corporation.

Our Take

Issuing bonds using the Sales Tax Securitization Corporation will save Chicago an estimated $94 million if the city refinances the planned amount of $3 billion.  The borrowing costs are lower using the corporation, which is a separate entity from the city of Chicago, as the corporation is rated nine notches higher than Chicago general obligation debt.

All expressions of opinions are subject to change without notice in reaction to shifting market conditions.  All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.  Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.