BofA turns "bullish" on muni bonds in 2019

The bear market for municipal bonds likely peaked in November, say Bank of America analysts.

Factors driving the bear market--tax reform, Fed hikes, and U.S. trade tariffs-- should ease and "help the muni bull market" in 2019.

See a more decisive muni rally in February and steady muni mutual fund inflows in 2019.

The group advises to be "cautious of high yield spread widening in 2019," though "higher-rated credits, especially the states', look extremely solid--our favorites are in California and Texas."

Estimate issuance target of long-term muni bonds at $365B--$270B in new money and $95B refundings.

Source: Bloomberg First Word.

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