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November
8
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Week In Review

China

White House officials indicated that trade talks with China are progressing well and that negotiations on a location for a Trump-Xi signing summit are underway.  Chinese officials stated that an agreement would involve the phased, proportional reduction of tariffs by both sides, which National Economic Council Director Larry Kudlow seemed to confirm.  On Friday President Trump stated that no rollback of tariffs is agreed to yet, and that any agreement would not fully eliminate tariffs.  Capital markets rallied on the greater likelihood of a resolution to the trade conflict and then drifted following Trump’s comments on Friday.

Our Take

Some resolution of the U.S.-China trade conflict would be a boost for global growth at a time when it is flagging.  However, this conflict has had many twists and turns and several major reversals when a resolution seemed near.  Given this history it is prudent to be cautious in expectations of progress until tangible agreements are signed and in force.


Municipals

Voters approved at least $17 billion of new issue bond sales this week.  A total of $34 billion of bond sales were on the ballot according to Bloomberg.  The amount of new debt issuance on the ballot this year was less than last year’s $76 billion on the ballot.  Most of the largest bond sales were approved, including $3.5 billion in Harris County, Texas and $1 billion in Ann Arbor, Michigan.

Our Take

Municipalities looking to issue new debt continue to take advantage of the low interest rate environment and investor demand for municipal bonds.  Even though the amount of new debt issuance presented on the ballot this November was lower than last year, overall new issuance in 2019 is up 17% compared to 2018.


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.