Historic 6% November 2023 Rally in MuniLand

·   The municipal bond market measured by the Bloomberg Municipal Bond Index posted a record monthly rally of over 6% in November 2023. The last time the market rallied this much was during Paul Volcker's war on inflation in 1986.

·   After August 2023 when the muni market saw trades which produced yields in 15 years, we saw further weakening in September and October. But then we saw a sudden, violent, historic rally in the Municipal Bond market in November 2023 with the recognition of attractive bond yields.

·   After being in the red through October 31, 2023, the Bloomberg muni index is up almost 3% for the year through November 30th 2023. This marks a significant rebound from October's loss of 2.2%.

Still Finding Yields above 4% and 5%

·   Folks, I still would not wait or try to time this market. During the last week of November 2023, we successfully bid on multiple investment grade municipal bonds with yields above 5%. It is only a matter of time before more retail investors wake up and begin to recommit additional capital to municipal bonds at still attractive prices.

·   Remember, 70% of this asset class is owned by individual investors who tend to overbuy and also oversell bonds. It is not easy to find 4% and even 5% yields, but this is what we are paid for.

W. Jeffrey Watkinson



Senior Vice President

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