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  • Jonathan Poyer

Weekly Muni Update 7/11/2022



John Tuohy had some great Muni Commentary worth sharing. You can find his archive HERE.


Presented without commentary:


High anxiety ruled the financial markets last week. For treasury yields, the 2-year note did its best impression of a ping-pong ball surging 27 basis points to get back to well over 3% after crashing down into the 2.80s the week prior.


Equities rebounded from the previous week’s thrashing, but there does not seem to be too much bullish conviction. Corporate spreads also tightened but the trade flow was similarly cautious. The big economic news items last week were Wednesday’s release of the June FOMC minutes, and the June employment figures. The minutes underscored the Fed’s resolve to not repeat the 1970s and curtail tightening upon the first real sign of an economic slowdown. In the 1970s, the Fed abandoned its inflation fight multiple times to respond to economic weakness and the net result was further embedding of the high inflation psyche that ended up needing Paul Volcker.


Friday’s June employment numbers showed no real let up in the tightness of the labor market, another sign to the Fed that they will have to stay aggressive. This realization caused the USD to surge for yet another week. Parity with the Euro seems all but certain now and the Japanese Yen continues to weaken to levels not seen since 1998. The strength of the USD and global recession fears took most commodities to the woodshed.

  • The S&P 500 rose 1.9% for the week. The average daily move was .53%.

  • The NASDQ increased 4.57% for the week. The average daily move for the week was 1.1%.

  • The 2-year Treasury yield rebounded 27 basis points closing at 3.11% on Friday. High year-over-year 3.43%, low yield .10%.

  • The 10-year Treasury yield rose 20 basis points for the week, closing at 3.08% on Friday. Year-over-year high yield 3.47%, low yield .91%.

  • The VIX Index fell 8% for the week, closing at 24.64 Friday. Year-over-year high 36.45 and low 15.01.

  • The MOVE Index rose .8% for the week, closing at 145.25 on Friday. On Monday, the index hit a new year-over-year high of 156.16. Year-over-year high 156.16 and low 51.73.

  • 5-year Investment Grade Corporates (as measured by Markit CDX) spreads narrowed 11 basis points for the week closing at 90 basis points Friday. High spread Year-over-year high 102 and low of 46.56.

  • High Yield corporate debt (as measured by Markit CDX) tightened 60 basis points, closing at 517 basis points on Friday. Year-over-year high 588, and low 269.

  • US Dollar Index continued to surge, up 1.8%% for the week closing at 107.01 on Friday, a new year-over-year high. Year-over-year high 107.01 and low 91.86.

  • WTI Crude fell 3.4% using the August WTI Futures contract, closing at 104.79 Friday. Year-over-year 123.70, and low 47.62.

  • Gold, as measured by the August 2022 futures contract fell 3.3% for the week closing at 1,742 on Friday. High price for the front contract year-over-year 2,043 and low 1,729.

  • Bitcoin rebounded 12.6%, closing at 21,846 Friday. High price year-over-year 67,734 and low 17,785.

The Week Ahead


We come in this morning with equities down across most major market sectors and Treasury yields down a fair amount. Over the weekend there were numerous articles, including one from the latest “Fed Whisperer” Nick Timiraos of the Wall Street Journal, reminding us of the central bank “stop and go” mistakes of the 1970s and stating (correctly in my opinion) that there are lessons learned to this Fed. If you think the Fed will reverse course and start easing in 2023 you may be in for a very rude awakening. Earning season kicks off this week and everyone seems to be really nervous to see how inflation impacted second quarter earnings as well as how it will affect future projections. On Wednesday we get June CPI. Right now, market economists think that year-over-year core will slightly decline from last month’s 6% shocker. Limited upside and lots of downside if the number is either much lower or much higher from projections. Tough trade.

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