The number of new applications for unemployment benefits increased moderately last week as the labor market seems to be cooling a little. According to the Labor Department, the number of claims filed rose by 9000. These claims are still consistent with a growth pattern. Nonfarm payrolls also increased in November.
Yesterday, the Federal Reserve’s Beige Book report indicated that employment was flat or slightly up, and that worker turnover was low.
The Fed is expected to cut rates this month by .25% possibly. In a CNBC interview yesterday, Chairman Jerome Powell said that the economy is stronger now than the committee had expected when it began lowering interest rates. His comments were taken as possible support for a slower pace of interest rate cuts.
Blackstone Inc. is refinancing $550 million in municipal debt for 8 Spruce St., a 76-story luxury residential tower in downtown Manhattan designed by Frank Gehry. The financing includes $204 million in tax-exempt Liberty Bonds, part of a post-9/11 federal recovery program, and taxable bonds structured similarly to commercial mortgage-backed securities. Rated by Moody’s, the bonds mature in 2031.
Chicago plans to sell $806 million in municipal bonds this week to refinance debt and address a nearly $1 billion budget gap for 2024. The sale includes $679.7 million in sales-tax-backed debt and $126.6 million in general obligation bonds amidst tensions over Mayor Brandon Johnson’s rejected $300 million property tax hike. The city’s fiscal challenges, driven by rising labor and pension costs and lower-than-expected revenue, have led to credit rating warnings from agencies like S&P and Kroll, as we have been discussing for a while now. While investors are attracted to higher-yield debt, Chicago’s bonds trade at higher yields than similarly rated securities due to its budget impasse and long-term pension liabilities. Despite temporary relief from federal aid, the city’s legacy debt and pension burdens remain a pressing concern, with analysts cautioning against reliance on one-time fiscal measures. The bond sale will test investor confidence in the city and the capability to resolve this issue.
According to the Port Authority, New York and New Jersey commercial airports had a record 12.4 million passengers in October, marking their busiest October ever and putting them on pace for a record year. International travel also set a new October record with 4.3 million passengers. We are reaching pre-pandemic levels, which is suitable for airport paper.
At The DRL Group, we specialize in helping high-net-worth investors maximize tax-free returns by proactively maintaining their custom bond portfolios through all market conditions.
David Loesch
[email protected]
www.drlgroup.net
605-B Park Grove
Katy, TX 77450
866.664.4040 (toll-free)
281.398.8600 (direct)
Securities are offered through New Edge Securities, Inc., a registered Broker-Dealer, FINRA and SIPC member. The DRL Group is not a subsidiary or control affiliate of New Edge Securities, Inc.New Edge Securities, Inc. has no affiliation with Bond Desk Trading LLC, Bond Trader Pro, Tradeweb Direct, Bondpoint, TMC, or any other ECN.
Do not buy discount bonds based on the Yield-to-Call (YTC). YTC does not indicate total return; this yield is valid only if the security is called. Bonds may be callable on multiple dates or any date following the first call date, so yield to call is based on the earliest stated call date. Discounted bonds may be subject to capital gains tax. Bonds may be subject to OID (Original Issue Discount). Bonds could also be subject to the DeMinimis Rule; please consult your tax advisor for further clarification. Insured bonds are issued for timely principal and interest payment only, do not cover potential market loss, and are subject to the insurance company’s claims-paying ability. Municipal income may be subject to state, local, and Alternative Minimum Tax (AMT) taxation. Corporate and Municipal securities are subject to gains/losses based on the level of interest rates, market conditions, and credit quality of the issuer. Non-rated (NR), With-Drawn (WR), or below investment grade bonds, lower-rated bonds carry a greater potential risk of default & should be considered by sophisticated investors only.
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This summary is for informational purposes only and is not an offer or solicitation to purchase, sell, recommend, or endorse any security or issuer. New Edge Securities, Inc. and DRL Group do not represent this information’s accuracy, completeness, or timeliness.
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