Fixed income

State and local governments will be able to issue a total of $32.821 billion of private-activity bonds under a national volume cap next year — 1.2% or $379.96 million more than in 2011.

Bonds.com Group said it raised $16.6 million from a group of investors that includes an entrepreneur that created the first hedge fund in Beirut, Lebanon.

Markit, a specialist in valuations and post-trade processing for swaps and other non-exchange traded products, has launched a service to help US mutual funds and other institutional investors find a fair value for their bonds.

November saw a solid month of new municipal bond issuance for 2011, but it paled in comparison with the same period in 2010, when Build America Bond issuance was particularly strong.

Three investment chiefs talk stocks, sectors and the economy.

"Frank's loss will be felt by generations of Goldman Sachs professionals," Lloyd C. Blankfein, chairman and CEO of Goldman Sachs, said.

An industry group has asked regulators to disclose the factors they will use to determine which muni broker-dealers pose more risks and should undergo compliance examinations more often under a new proposed exam program.

Traders anticipate that the recent delicate balance between supply and demand in the muni market will be maintained even as issuance ramps up this week in the face of rollover funds.

Investors seeking diversity, liquidity and competitive yields when compared to other fixed-income products are trying a relatively new alternative: municipal bond exchange-traded funds.

Investors' continuing obsession with purchasing Treasury bonds is a sign of 'irrational exuberance,' says the chairman of investment manager T. Rowe Price when 10-year yields are under 2.0%.

Muni market participants say the rule in its current form could affect about half of municipal securities and reduce liquidity in the muni bond market. The Volcker Rule was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act that became law in 2010.

Stocks and bonds are moving in the opposite direction more so than anytime in the last 10 years.

The waves of issuance rolling into the municipal primary market the past few weeks continue to grow. Last week's volume, at more than $9 billion, approached record territory for 2011, and this week's anticipated issuance should easily set a new high for the year, at nearly $12 billion.

Alabama issuers should not see their ratings lowered by the Jefferson County bankruptcy action, but investor perception could take its toll on future issues.

Retail reaction to the announcement that Jefferson County, Ala., filed the largest municipal bankruptcy in U.S. history is likely to be muted, yet will still be closely monitored, portfolio managers say.

Wachovia Bank NA, currently Wells Fargo & Co., has reached a tentative settlement of a class action suit with municipal issuers over antitrust charges of bid-rigging for municipal investment, derivatives and other contracts.

Secondary market trading volume surged to more than $851 billion in the third quarter of 2011, the highest so far this year, but still fell 8.5% short of the almost $931 billion reached during the same period last year, the Municipal Securities Rulemaking Board said Wednesday.

Analysts and managers say they are finding value in the municipal market by taking advantage of attractive intermediate yields and buying opportunities presented by credits that find themselves in the headlines, among other strategies.

Winners will include—not only cyclical sectors that do well early in a market cycle—but also defensive plays.

Tax-exempt yields soared as demand for safe-haven assets fell on positive news coming from Europe.