HomeMy Public PortalAbout2022-08-16-LSAThis Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or
other written documentation relating to each item of business referred to on the Agenda are on file in the Office of
the City Clerk and are available for public inspection. Any person who has a question concerning any of the
agenda items may call the City Manager at (310) 603-0220, ext. 200.
Procedures for Addressing the Council
IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE
COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOOD.CA.US OR FILL OUT A FORM
PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE
MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN
THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL.
AGE N D A
City of Lynwood as Succe ssor Age ncy
to the Lynwood Re de v e lopme nt Agency
TO BE HE L D ON
August 16, 2022
CO U N C I L C H A MB ERS - 11350 BULLI S RD. LY NWOOD, CA 90262 or We b
confe rence via ZOO M - To participate v ia Zoom or by telephone : 1-669-900-9128
or 1-253-215-8782 Mee ting I D: 835 2029 8238
Duly Poste d on 8/12/2022 By MQ
6:00 PM
1.C ALL TO OR D ER
2.C E R T IF IC ATION OF AGE N D A P OS T IN G B Y S E C R E TARY
3.R OL L C AL L OF ME MB E R S
J orge C asanova, Mayor
J ose L uis S olache, Mayor P ro Tem
Oscar F lores, C ouncil Member
Mari sela S antana, C ouncil Member
Ri ta S oto, C ouncil Member
P U B L IC OR AL C OMMU N IC AT ION S
(Regarding Agenda Items Only)
N ON-AGE N D A P U B LIC OR AL C OMMU N IC AT ION S
THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD SUCCESSOR
AGENCY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD SUCCESSOR AGENCY AND NOT LISTED
ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION
OF THE ISSUE BY LYNWOOD SUCCESSOR AGENCY, BUT LYNWOOD SUCCESSOR AGENCY MAY REFER THE
Lynwood Successor Agency - Page 1 of 31
MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M.
Brown Act, Government Code Section 54954.2 (a).)
C ON SEN T C AL E N D AR
ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION
AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON
THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC
ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION.
4.T R E AS U R E R'S MON T H LY IN V E S T ME N T R E P OR T
Comments:
The purpose of this item is to have the Honorable Mayor and the Lynwood C ity C ouncil, as
S uccessor to Lynwood Redevelopment B oard revi ew the Treasurer ’s Monthly Investment Report
as requi red by S tate S tatutes. (C T)
Recommendation:
The followi ng is the Investment Report for the month ending J uly 31, 2022. This report is provi ded
to ensure the C i ty C ouncil is i nformed of the D epartment’s investment acti vities. The report
satisfies the recommended reporting requi rements of the C ity of Lynwood, which addresses the
C ity C ouncil’s request for monthly financial information.
It is recommended that the C ity C ouncil for the C ity of Lynwood receive and file the attac hed Monthly
Investment R eport.
AD J OU R N ME N T
C ITY O F LYN W OO D A S S UC C E S S O R A GE NC Y TO THE LYNW OO D R E D E V E L O P M E NT
A G E NC Y M E E TINGS W IL L B E P O S TE D A S NE E D E D . THE NE X T M E E TING W IL L B E HE L D
IN THE C OUNC IL C HA M B E RS O F C ITY H A L L A NNE X , 11350 B UL L IS RO A D , C ITY OF
LYNW O OD , C A L IF ORNIA .
Lynwood Successor Agency - Page 2 of 31
A genda I tem # 4.
AGENDA STAF F REPORT
D AT E: A ugust 16, 2022
TO: Honorable Mayor and Members of Lynwood C ity C ouncil, as S uccessor to Lynwood
Redevelopment B oard
AP P R OV E D B Y: E rnie Hernandez, C ity Manager
P R E PAR E D B Y: Gabriela C amacho, C ity Treasurer
S heila Harding, D eputy C ity Treasurer
S U B J E C T: TRE A S URE R'S M O N TH LY INV E S TME NT RE P ORT
Recommendation:
The following is the Investment Report for the month endi ng J uly 31, 2022. Thi s report is provi ded to ensure the
C ity C ouncil is i nformed of the D epartment’s investment activi ti es. The report satisfies the recommended
reporting requirements of the C i ty of Lynwood, which addresses the C ity C ouncil’s request for monthly fi nancial
information.
It is recom mended that the C ity C ouncil for the C ity of Lynwood rec eive and file the attached Monthly Investment R eport.
Background:
Government C ode S ection 53607, last amended 1996, with reference to the reporting of investment transacti ons
states that the Treasurer shall make a monthly report of those transacti on to the legislative body. Government
C ode S ection 53646 (b) (1), last amended 2004, with reference to discussion related to establishment of an
Investment P olicy and i nvestment reporting states that “the Treasurer may render a quarterly report”. To determi ne
the applicable code inasmuch as reference to Government C ode S ection 53607 or non-compli ance thereof has
never been included i n past audit findings. While Government C ode S ection 53646 (b) (1) which is the most
current version related to Investment Reporting utilizes the word “may” indicating the reporting mechanism is
optional, to err on the side of caution, and in order to ensure that we are in compliance with all Government C odes,
a new procedure of submitting monthly reports to the C ouncil/A gency agenda was implemented. A ttached for
C ouncil/A gency revi ew is the C ity’s/A gency’s Monthly Treasurer ’s Report.
S ubsequent reports will be provided on a monthly basis at the second meeting of each month.
Discussion and Analysis:
Lynwood Successor Agency - Page 3 of 31
The investment transactions were executed i n accordance with the C ity's Investment P olicy and the C ali forni a
S tate Government C ode S ection 5346(b)(3) that requires the general fund is able to meet its expenditure
requirements for the next six months.
Fiscal Impact:
The action recommended in this report will not have a fiscal impact on the C ity.
Coordinated With:
F HN F inanci al Main S treet A dvisors currently monitors the C ity’s i nvestment activities.
AT TAC H ME N T S:
Description
AC TIV IT Y & P E R F OR MAN C E S U MMARY - JU LY 2022
F H N E C ON OMIC U PD ATE - J U LY 2022
E C ON OMIC & MON ETARY P OL IC Y - J U LY 2022
Lynwood Successor Agency - Page 4 of 31
ACTIVITY & PERFORMANCE SUMMARY
JULY 2022
1
The following is the City’s cash flow and the monthly investment report. The monthly report includes a summary
of the City’s investment portfolio, a monthly review of the investment market as prepared by the investment
managers and detailed information on monthly transactions, cash flows and investments by issuer.
FHN Investment Advisors manage the portion of investments not invested by LAIF (State Local Agency Investment
Fund).
The tables below provide key statistics regarding the City’s cash flow and investment portfolio as of July 31, 2022.
Type Balances Held
Cash - US Bank $ 32,615,052.64
Cash - JPMorgan Chase Bank $ 7,717,688.79
Local Agency Investment Fund $ 9,563,138.29
FHN Investment Advisors/BNY $ 21,153,534 .75
TOTAL $ 49,895,879.72
FHN ACCOUNT SUMMARY
July 2022 June 2022
Market Value $30,716,673 $25,569,356
Book Value $31,306,790 $26,223,310
Variance -$590,117 -$694,864
Par Value $31,267,560 $26,223,310
Net Asset Value $98.12 $97.35
Book Yield 1.42% 1.20%
Market Yield 2.18% 2.32%
Years to Maturity 1.37 1.55
Effective Duration 1.27 1.44
FHN INVESTMENT COMPLIANCE
% %
Company Book Value of Portfolio of Total
US Treasuries 6,501,174.89 20.77% 100%
US Federal Agencies 3,821,956.14 12.21% 100%
Supranational Obligations 0.00 0% 30%
LAIF 9,563,138.29 30.55% 75%
Commercial Paper 0.00 0.00 25%
Money Market Funds 5,188,421.30 16.57% 20%
Negotiable Certificates of Deposit 4,215,221.83 13.46% 30%
Corporate Obligations 2,016,877.55 6.44% 30%
State and Local Governments 0.00 0% 100%
Lynwood Successor Agency - Page 5 of 31
ACTIVITY & PERFORMANCE SUMMARY
JULY 2022
2
All of the City’s rated investments were rated “A” or higher by at least two rating agencies on June 30, 2022.
The City’s investments comply with its current investment policy, which emphasizes the safety, liquidity, and
return of its investments, allowing the city to meet its expenditures for the next six months.
FHN INCOME EARNED SUMMARY
June Month End Fiscal Year to Date
Interest
Interest Received/Purchased. 44,249.20 44,249.20
Plus Accrued Interest at End of Period 54,619.36 54,619.36
Less Accrued Interest at Beginning of Period -74,680.06 -74,680.06
Interest Earned During Period 24,188.50 24,188.50
Total Adjustments for Amortization/Accretion -1,678.82 -1,678.82
Total Capital Gains or Losses 0.00 0.00
Total Earnings During Period 22,509.68 22,509.68
PURCHASES & MATURITIES
PURCHASE(S)
SETTLEMENT
DATE NAME
TRANSACTION
TYPE ISSUER PAR VALUE
MARKET
VALUE RATING
7/7/22
Capital One
Bank NA Purchase
Cert of
Deposit 248,000.00 256,515.32 NR
7/7/22 Ally Bank Purchase
Cert of
Deposit 248,000.00 253,202.90 NR
Discover Bank Purchase
Cert of
Deposit 248,000.00 255,933.73 NR
REDEMPTION(S)
MATURITY
DATE NAME
TRANSACTION
TYPE ISSUER REDEMPTION
COUPON
RATE INTEREST
6/13/2022
Royal Bank of
Canada, NY Mature
Comm
Paper 350,000.00 0.000% 0.00
Lynwood Successor Agency - Page 6 of 31
Monthly Economic and Market Update
July 2022
Lynwood Successor Agency - Page 7 of 31
Economic and Market Update
*Estimates for the current quarter/month, some data are lagged Sources: FHN Main Street and Bloomberg
7/31/2022
Item 7/31/2022 6/30/2022 Change
U.S. Payrolls Monthly Change 528,000 398,000 130,000
Unemployment Rate 3.5%3.6%(0.1%)
Labor Force Participation 62.1%62.2%(0.1%)
Effective Fed Funds Rate 2.32%1.58%0.74%
2 Year T-Note 2.89%2.96%(0.07%)
3 Month T-Bill 2.36%1.67%0.70%
3 Year T-Note 2.81%3.01%(0.20%)
5 Year T-Note 2.68%3.04%(0.36%)
10 Year T-Note 2.65%3.02%(0.37%)
U.S. Fed Debt Avg Yield*1.70%1.61%0.09%
30 Year Mortgage Rate 5.28%5.83%(0.55%)
1-5 Yr Agency Spread 0.05%0.03%0.02%
1-5 Yr A-AAA Corporate Spread 0.66%0.80%(0.14%)
Dow Jones 32,845 30,775 6.7%
S&P 500 4,130 3,785 9.1%
Consumer Price Index YOY*8.8%9.1%(0.3%)
U.S. Avg Regular Unleaded $4.21 $4.84 ($0.63)
Retail Sales YOY*9.7%8.4%1.3%
Case-Shiller Home Prices YOY*20.5%21.1%(0.7%)
Consumer Confidence 98.7 103.2 (4.5)
Gold (per ounce)$1,765.94 $1,807.27 ($41.33)
Dollar Index 105.90 104.69 1.22
2Lynwood Successor Agency - Page 8 of 31
Economic and Market Update
* Real Rate (Inflation Adjusted)
Source: Bureau of Economic Analysis
Estimate: Bloomberg's Survey of Economists
As of: 7/31/2022
7/31/2022
2.
9
-1.
4
5.
2
4.
7
1.
8 3.
3
2.
3
1.
3
0.
6 2.
4
1.
2 2.
4
2.
0
1.
9
2.
3
2.
9 3.
8
3.
1
3.
4
1.
9
0.
9 2.
4 3.
2
2.
8
1.
9
-5.
1
-31
.
2
33
.
8
4.
5 6.
3
6.
7
2.
3
6.
9
-1.
6
-0.
9
1.
7
1.
4
1.
1
1.
1
-45
-35
-25
-15
-5
5
15
25
35
45
Q4
2
0
1
3
Q1
2
0
1
4
Q2
2
0
1
4
Q3
2
0
1
4
Q4
2
0
1
4
Q1
2
0
1
5
Q2
2
0
1
5
Q3
2
0
1
5
Q4
2
0
1
5
Q1
2
0
1
6
Q2
2
0
1
6
Q3
2
0
1
6
Q4
2
0
1
6
Q1
2
0
1
7
Q2
2
0
1
7
Q3
2
0
1
7
Q4
2
0
1
7
Q1
2
0
1
8
Q2
2
0
1
8
Q3
2
0
1
8
Q4
2
0
1
8
Q1
2
0
1
9
Q2
2
0
1
9
Q3
2
0
1
9
Q4
2
0
1
9
Q1
2
0
2
0
Q2
2
0
2
0
Q3
2
0
2
0
Q4
2
0
2
0
Q1
2
0
2
1
Q2
2
0
2
1
Q3
2
0
2
1
Q4
2
0
2
1
Q1
2
0
2
2
Q2
2
0
2
2
Q3
2
0
2
2
Q4
2
0
2
2
Q1
2
0
2
3
Q2
2
0
2
3
Pe
r
c
e
n
t
U.S. GDP (Quarter over Quarter Annualized)*
Estimates
3Lynwood Successor Agency - Page 9 of 31
Economic and Market Update
Source: Bureau of Labor Statistics
12 Month Average Job Change 508,455
7/31/2022
-22
-20
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
Ja
n
-
1
8
Ap
r
-
1
8
Ju
l
-
1
8
Oc
t
-
1
8
Ja
n
-
1
9
Ap
r
-
1
9
Ju
l
-
1
9
Oc
t
-
1
9
Ja
n
-
2
0
Ap
r
-
2
0
Ju
l
-
2
0
Oc
t
-
2
0
Ja
n
-
2
1
Ap
r
-
2
1
Ju
l
-
2
1
Oc
t
-
2
1
Ja
n
-
2
2
Ap
r
-
2
2
Mi
l
l
i
o
n
s
U.S. Monthly Non-Farm Payrolls Change
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Ja
n
-
1
8
Ap
r
-
1
8
Ju
l
-
1
8
Oc
t
-
1
8
Ja
n
-
1
9
Ap
r
-
1
9
Ju
l
-
1
9
Oc
t
-
1
9
Ja
n
-
2
0
Ap
r
-
2
0
Ju
l
-
2
0
Oc
t
-
2
0
Ja
n
-
2
1
Ap
r
-
2
1
Ju
l
-
2
1
Oc
t
-
2
1
Ja
n
-
2
2
Ap
r
-
2
2
Mi
l
l
i
o
n
s
U.S. Monthly Non-Farm Payrolls YOY Change
4Lynwood Successor Agency - Page 10 of 31
Economic and Market Update
Source: Bureau of Labor Statistics
7/31/2022
0
5
10
15
20
25
30
Ja
n
-
1
8
Ma
r
-
1
8
Ma
y
-
1
8
Ju
l
-
1
8
Se
p
-
1
8
No
v
-
1
8
Ja
n
-
1
9
Ma
r
-
1
9
Ma
y
-
1
9
Ju
l
-
1
9
Se
p
-
1
9
No
v
-
1
9
Ja
n
-
2
0
Ma
r
-
2
0
Ma
y
-
2
0
Ju
l
-
2
0
Se
p
-
2
0
No
v
-
2
0
Ja
n
-
2
1
Ma
r
-
2
1
Ma
y
-
2
1
Ju
l
-
2
1
Se
p
-
2
1
No
v
-
2
1
Ja
n
-
2
2
Ma
r
-
2
2
Ma
y
-
2
2
Pe
r
c
e
n
t
Unemployment Rates
U.S.A Nevada California Idaho Washington Hawaii Oregon Utah
5Lynwood Successor Agency - Page 11 of 31
Economic and Market Update
Source: Bureau of Labor Statistics
7/31/2022
128
130
132
134
136
138
140
142
144
146
148
150
152
154
Ju
l
-
1
2
Fe
b
-
1
3
Se
p
-
1
3
Ap
r
-
1
4
No
v
-
1
4
Ju
n
-
1
5
Ja
n
-
1
6
Au
g
-
1
6
Ma
r
-
1
7
Oc
t
-
1
7
Ma
y
-
1
8
De
c
-
1
8
Ju
l
-
1
9
Fe
b
-
2
0
Se
p
-
2
0
Ap
r
-
2
1
No
v
-
2
1
Ju
n
-
2
2
Mi
l
l
i
o
n
s
U.S. Number of Employed
Full-Time and Part-Time
60.0
60.5
61.0
61.5
62.0
62.5
63.0
63.5
64.0
Ju
l
-
1
2
Fe
b
-
1
3
Se
p
-
1
3
Ap
r
-
1
4
No
v
-
1
4
Ju
n
-
1
5
Ja
n
-
1
6
Au
g
-
1
6
Ma
r
-
1
7
Oc
t
-
1
7
Ma
y
-
1
8
De
c
-
1
8
Ju
l
-
1
9
Fe
b
-
2
0
Se
p
-
2
0
Ap
r
-
2
1
No
v
-
2
1
Ju
n
-
2
2
Pe
r
c
e
n
t
U.S. Labor Force Participation Rate
6Lynwood Successor Agency - Page 12 of 31
Economic and Market Update
Source: Department of Labor and Bloomberg
7/31/2022
Weekly Initial Jobless Claims is the actual number of people who have filed for Unemployment benefits for the first time. The following five eligibility criteria must be met in order to file for
unemployment benefits: 1. Meet the requirements of time worked during a 1 year period (full time or not). 2. Become unemployed through no fault of your own (cannot be fired). 3. Must
be able to work; no physical or mental holdbacks. 4. Must be available for work. 5. Must be actively seeking work.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
19
9
5
19
9
6
19
9
7
19
9
8
19
9
9
20
0
0
20
0
1
20
0
2
20
0
3
20
0
4
20
0
5
20
0
6
20
0
7
20
0
8
20
0
9
20
1
0
20
1
1
20
1
2
20
1
3
20
1
4
20
1
5
20
1
6
20
1
7
20
1
8
20
1
9
20
2
0
20
2
1
Mi
l
l
i
o
n
s
Weekly Initial Jobless Claims
(4 Week Moving Average)
7Lynwood Successor Agency - Page 13 of 31
Economic and Market Update
*Real: Inflation Adjusted
Source: U.S. Census Bureau Source: Conference Board
7/31/2022
-30
-20
-10
0
10
20
30
40
50
60
Ja
n
-
1
8
Ap
r
-
1
8
Ju
l
-
1
8
Oc
t
-
1
8
Ja
n
-
1
9
Ap
r
-
1
9
Ju
l
-
1
9
Oc
t
-
1
9
Ja
n
-
2
0
Ap
r
-
2
0
Ju
l
-
2
0
Oc
t
-
2
0
Ja
n
-
2
1
Ap
r
-
2
1
Ju
l
-
2
1
Oc
t
-
2
1
Ja
n
-
2
2
Ap
r
-
2
2
Pe
r
c
e
n
t
U.S. Real* Retail Sales YOY % Change
40
50
60
70
80
90
100
110
120
130
140
Ja
n
-
1
2
Ju
l
-
1
2
Ja
n
-
1
3
Ju
l
-
1
3
Ja
n
-
1
4
Ju
l
-
1
4
Ja
n
-
1
5
Ju
l
-
1
5
Ja
n
-
1
6
Ju
l
-
1
6
Ja
n
-
1
7
Ju
l
-
1
7
Ja
n
-
1
8
Ju
l
-
1
8
Ja
n
-
1
9
Ju
l
-
1
9
Ja
n
-
2
0
Ju
l
-
2
0
Ja
n
-
2
1
Ju
l
-
2
1
Ja
n
-
2
2
Ju
l
-
2
2
In
d
e
x
V
a
l
u
e
U.S. Consumer Confidence
8Lynwood Successor Agency - Page 14 of 31
Economic and Market Update
CPIX: Consumer Price Index, excluding food and energy PCEC: Personal Consumption Expenditure Core
Source: Bureau of Labor Statistics and Bureau of Economic Analysis
7/31/2022
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Ja
n
-
1
8
Ap
r
-
1
8
Ju
l
-
1
8
Oc
t
-
1
8
Ja
n
-
1
9
Ap
r
-
1
9
Ju
l
-
1
9
Oc
t
-
1
9
Ja
n
-
2
0
Ap
r
-
2
0
Ju
l
-
2
0
Oc
t
-
2
0
Ja
n
-
2
1
Ap
r
-
2
1
Ju
l
-
2
1
Oc
t
-
2
1
Ja
n
-
2
2
Ap
r
-
2
2
Pe
r
c
e
n
t
CPI and CPIX YOY % Change
CPI CPIX
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Ja
n
-
1
8
Ap
r
-
1
8
Ju
l
-
1
8
Oc
t
-
1
8
Ja
n
-
1
9
Ap
r
-
1
9
Ju
l
-
1
9
Oc
t
-
1
9
Ja
n
-
2
0
Ap
r
-
2
0
Ju
l
-
2
0
Oc
t
-
2
0
Ja
n
-
2
1
Ap
r
-
2
1
Ju
l
-
2
1
Oc
t
-
2
1
Ja
n
-
2
2
Ap
r
-
2
2
Pe
r
c
e
n
t
PCE and PCEC YOY % Change
PCE PCEC
9Lynwood Successor Agency - Page 15 of 31
Economic and Market Update
Sources: New (U.S. Census Bureau),Existing (National Assoc. of Realtors)
Source: Case-Shiller Seasonally Adjusted Annual Rate
7/31/2022
0
2
4
6
8
10
12
14
16
18
20
22
24
Fe
b
-
1
4
Ju
l
-
1
4
De
c
-
1
4
Ma
y
-
1
5
Oc
t
-
1
5
Ma
r
-
1
6
Au
g
-
1
6
Ja
n
-
1
7
Ju
n
-
1
7
No
v
-
1
7
Ap
r
-
1
8
Se
p
-
1
8
Fe
b
-
1
9
Ju
l
-
1
9
De
c
-
1
9
Ma
y
-
2
0
Oc
t
-
2
0
Ma
r
-
2
1
Au
g
-
2
1
Ja
n
-
2
2
YO
Y
P
e
r
c
e
n
t
Case-Shiller 20 City U.S. Home Price Index
YOY % Increase
200
300
400
500
600
700
800
900
1,000
1,100
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Ja
n
-
1
4
Ju
l
-
1
4
Ja
n
-
1
5
Ju
l
-
1
5
Ja
n
-
1
6
Ju
l
-
1
6
Ja
n
-
1
7
Ju
l
-
1
7
Ja
n
-
1
8
Ju
l
-
1
8
Ja
n
-
1
9
Ju
l
-
1
9
Ja
n
-
2
0
Ju
l
-
2
0
Ja
n
-
2
1
Ju
l
-
2
1
Ja
n
-
2
2
Ne
w
-Th
o
u
s
a
n
d
s
Ex
i
s
t
i
n
g
-Mi
l
l
i
o
n
s
U.S. New and Existing Home Sales
Existing-Left
New-Right
10Lynwood Successor Agency - Page 16 of 31
Economic and Market Update
Source: U.S. Treasury
7/31/2022
$12
$13
$14
$15
$16
$17
$18
$19
$20
$21
$22
$23
$24
$25
$26
$27
$28
$29
$30
$31
$32
Ju
l
-
1
2
Ja
n
-
1
3
Ju
l
-
1
3
Ja
n
-
1
4
Ju
l
-
1
4
Ja
n
-
1
5
Ju
l
-
1
5
Ja
n
-
1
6
Ju
l
-
1
6
Ja
n
-
1
7
Ju
l
-
1
7
Ja
n
-
1
8
Ju
l
-
1
8
Ja
n
-
1
9
Ju
l
-
1
9
Ja
n
-
2
0
Ju
l
-
2
0
Ja
n
-
2
1
Ju
l
-
2
1
Ja
n
-
2
2
Tr
i
l
l
i
o
n
s
U.S. Federal Debt Outstanding
1.3
1.5
1.7
1.9
2.1
2.3
2.5
2.7
Ju
l
-
1
2
Ja
n
-
1
3
Ju
l
-
1
3
Ja
n
-
1
4
Ju
l
-
1
4
Ja
n
-
1
5
Ju
l
-
1
5
Ja
n
-
1
6
Ju
l
-
1
6
Ja
n
-
1
7
Ju
l
-
1
7
Ja
n
-
1
8
Ju
l
-
1
8
Ja
n
-
1
9
Ju
l
-
1
9
Ja
n
-
2
0
Ju
l
-
2
0
Ja
n
-
2
1
Ju
l
-
2
1
Ja
n
-
2
2
Pe
r
c
e
n
t
U.S. Treasury Interest Bearing Debt Avg Rate
11Lynwood Successor Agency - Page 17 of 31
Economic and Market Update
Fed Funds Anticipated Rate from the June 15, 2022 FOMC Meeting
Source: Bloomberg
7/31/2022
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Ju
l
-
2
0
2
2
Au
g
-
2
0
2
2
Se
p
-
2
0
2
2
Oc
t
-
2
0
2
2
No
v
-
2
0
2
2
De
c
-
2
0
2
2
Ja
n
-
2
0
2
3
Fe
b
-
2
0
2
3
Ma
r
-
2
0
2
3
Ap
r
-
2
0
2
3
Ma
y
-
2
0
2
3
Ju
n
-
2
0
2
3
Ju
l
-
2
0
2
3
Au
g
-
2
0
2
3
Se
p
-
2
0
2
3
Oc
t
-
2
0
2
3
No
v
-
2
0
2
3
De
c
-
2
0
2
3
Ja
n
-
2
0
2
4
Fe
b
-
2
0
2
4
Ma
r
-
2
0
2
4
Ap
r
-
2
0
2
4
Ma
y
-
2
0
2
4
Ju
n
-
2
0
2
4
Ju
l
-
2
0
2
4
Au
g
-
2
0
2
4
Se
p
-
2
0
2
4
Oc
t
-
2
0
2
4
No
v
-
2
0
2
4
De
c
-
2
0
2
4
Ja
n
-
2
0
2
5
Fe
b
-
2
0
2
5
Ma
r
-
2
0
2
5
Ap
r
-
2
0
2
5
Ma
y
-
2
0
2
5
Ju
n
-
2
0
2
5
Pe
r
c
e
n
t
Fed Funds FuturesFed's Anticipated Rates
Fed Funds Futures
12Lynwood Successor Agency - Page 18 of 31
Economic and Market Update
Source: Bloomberg
Figures may not total due to rounding
3M
Maturity
-0.072.962.892Y
0.162.782.941Y
0.382.492.866M
0.701.672.36
2.65 3.02 -0.37
Change6/30/227/29/22
7/31/2022
3Y 2.81 3.01 -0.20
30Y 3.01 3.19 -0.17
5Y 2.68 3.04 -0.36
10Y
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
3M 6M 1Y 2Y 3Yr 5Y 10Y 30Y
Pe
r
c
e
n
t
U.S. Treasury Yield Curve Change
7/29/22
6/30/22
-60
-40
-20
0
20
40
60
80
3M 6M 1Y 2Y
3Y
r
5Y
10
Y
30
Y
Ba
s
i
s
P
o
i
n
t
s
Basis Point Change
13Lynwood Successor Agency - Page 19 of 31
Economic and Market Update
Source: Bloomberg
7/31/2022
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
Ju
n
-
1
7
Se
p
-
1
7
De
c
-
1
7
Ma
r
-
1
8
Ju
n
-
1
8
Se
p
-
1
8
De
c
-
1
8
Ma
r
-
1
9
Ju
n
-
1
9
Se
p
-
1
9
De
c
-
1
9
Ma
r
-
2
0
Ju
n
-
2
0
Se
p
-
2
0
De
c
-
2
0
Ma
r
-
2
1
Ju
n
-
2
1
Se
p
-
2
1
De
c
-
2
1
Ma
r
-
2
2
Ju
n
-
2
2
Pe
r
c
e
n
t
U.S. Treasury Yields: 3M and 1Y
1Y
3M
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
Ju
n
-
1
7
Se
p
-
1
7
De
c
-
1
7
Ma
r
-
1
8
Ju
n
-
1
8
Se
p
-
1
8
De
c
-
1
8
Ma
r
-
1
9
Ju
n
-
1
9
Se
p
-
1
9
De
c
-
1
9
Ma
r
-
2
0
Ju
n
-
2
0
Se
p
-
2
0
De
c
-
2
0
Ma
r
-
2
1
Ju
n
-
2
1
Se
p
-
2
1
De
c
-
2
1
Ma
r
-
2
2
Ju
n
-
2
2
Pe
r
c
e
n
t
U.S. Treasury Yields: 2Y and 5Y
5Y
2Y
14Lynwood Successor Agency - Page 20 of 31
Economic and Market Update
Source: Bloomberg
7/31/2022
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Ja
n
-
5
4
Ja
n
-
5
6
Ja
n
-
5
8
Ja
n
-
6
0
Ja
n
-
6
2
Ja
n
-
6
4
Ja
n
-
6
6
Ja
n
-
6
8
Ja
n
-
7
0
Ja
n
-
7
2
Ja
n
-
7
4
Ja
n
-
7
6
Ja
n
-
7
8
Ja
n
-
8
0
Ja
n
-
8
2
Ja
n
-
8
4
Ja
n
-
8
6
Ja
n
-
8
8
Ja
n
-
9
0
Ja
n
-
9
2
Ja
n
-
9
4
Ja
n
-
9
6
Ja
n
-
9
8
Ja
n
-
0
0
Ja
n
-
0
2
Ja
n
-
0
4
Ja
n
-
0
6
Ja
n
-
0
8
Ja
n
-
1
0
Ja
n
-
1
2
Ja
n
-
1
4
Ja
n
-
1
6
Ja
n
-
1
8
Ja
n
-
2
0
Ja
n
-
2
2
Pe
r
c
e
n
t
U.S. Treasury Yields 2Yr and 5Yr -Fed Funds Target Rate
5Yr
2Yr
Fed Funds
15Lynwood Successor Agency - Page 21 of 31
Economic and Market Update
Source: Bloomberg
7/31/2022
Global Treasury Rates
2 Year Yields 5 Year Yields 10 Year Yields
-0.09%
-0.05%
0.18%
0.26%
0.46%
0.53%
1.36%
1.70%
2.43%
2.88%
2.96%
-4.0%-2.0%0.0%2.0%4.0%
Japan
Switzlnd
France
Germany
Portugal
Spain
Italy
England
Australia
USA
Canada
-0.03%
0.09%
0.52%
0.89%
1.03%
1.05%
1.58%
2.22%
2.61%
2.68%
2.78%
-2.0%0.0%2.0%4.0%
Japan
Switzlnd
Germany
France
Portugal
Spain
England
Italy
Canada
USA
Australia
0.18%
0.40%
0.81%
1.38%
1.84%
1.86%
1.91%
2.61%
2.65%
3.01%
3.06%
0.0%1.0%2.0%3.0%4.0%
Japan
Switzlnd
Germany
France
Portugal
England
Spain
Canada
USA
Italy
Australia
16Lynwood Successor Agency - Page 22 of 31
Economic and Market Update
ICE BofAML Index (option adjusted spread vs. Treasury)ICE BofAML Index (option adjusted spread vs. Treasury)
1-5Yr Non-Callable Agency (GVPB)Corporate A-AAA Excluding Yankee (CVAC)
Source: ICE BofAML Indices
7/31/2022
Current Spread is 5 Current Spread is 66
-20
0
20
40
60
80
100
120
140
160
180
200
Ju
n
-
0
8
Ju
n
-
0
9
Ju
n
-
1
0
Ju
n
-
1
1
Ju
n
-
1
2
Ju
n
-
1
3
Ju
n
-
1
4
Ju
n
-
1
5
Ju
n
-
1
6
Ju
n
-
1
7
Ju
n
-
1
8
Ju
n
-
1
9
Ju
n
-
2
0
Ju
n
-
2
1
Ju
n
-
2
2
Ba
s
i
s
P
o
i
n
t
s
Spread: 1-5Yr Agency vs Treasury
0
50
100
150
200
250
300
350
400
450
500
550
600
650
Ju
n
-
0
8
Ju
n
-
0
9
Ju
n
-
1
0
Ju
n
-
1
1
Ju
n
-
1
2
Ju
n
-
1
3
Ju
n
-
1
4
Ju
n
-
1
5
Ju
n
-
1
6
Ju
n
-
1
7
Ju
n
-
1
8
Ju
n
-
1
9
Ju
n
-
2
0
Ju
n
-
2
1
Ju
n
-
2
2
Ba
s
i
s
P
o
i
n
t
s
Spread: 1-5Yr A-AAA Corporate vs Treasury
17Lynwood Successor Agency - Page 23 of 31
Economic and Market Update
*ICE BofAML Index (option adjusted spread vs. Treasury)*ICE BofAML Index (option adjusted spread vs. Treasury)
AAA Rated ABS (R0A1)CMO Agency 0-3Yr PAC (CM1P)
Source: ICE BofAML Indices
7/31/2022
Current Spread is 98 Current Spread is 47
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
Ju
n
-
0
8
Ju
n
-
0
9
Ju
n
-
1
0
Ju
n
-
1
1
Ju
n
-
1
2
Ju
n
-
1
3
Ju
n
-
1
4
Ju
n
-
1
5
Ju
n
-
1
6
Ju
n
-
1
7
Ju
n
-
1
8
Ju
n
-
1
9
Ju
n
-
2
0
Ju
n
-
2
1
Ju
n
-
2
2
Ba
s
i
s
P
o
i
n
t
s
Spread: AAA Asset Backed vs Treasury
-150
-100
-50
0
50
100
150
200
250
300
Ju
n
-
0
8
Ju
n
-
0
9
Ju
n
-
1
0
Ju
n
-
1
1
Ju
n
-
1
2
Ju
n
-
1
3
Ju
n
-
1
4
Ju
n
-
1
5
Ju
n
-
1
6
Ju
n
-
1
7
Ju
n
-
1
8
Ju
n
-
1
9
Ju
n
-
2
0
Ju
n
-
2
1
Ju
n
-
2
2
Ba
s
i
s
P
o
i
n
t
s
Spread: 0-3Yr Agency CMO vs Treasury
18Lynwood Successor Agency - Page 24 of 31
Economic and Market Update
Source: Bloomberg
7/31/2022
-2.9 -2.5
-0.8
0.1 0.4
1.2 1.6
2.4 2.5 3.0
4.1 4.3
5.2
6.6 6.8 6.8
8.6
9.2
9.9 10.1
10.9
12.6
(4)
(2)
0
2
4
6
8
10
12
14
Pe
r
c
e
n
t
Selected Sector Monthly Total Returns
19Lynwood Successor Agency - Page 25 of 31
Economic and Market Update
Source: Bloomberg
7/31/2022
-20.1 -19.8 -19.7 -16.7 -13.8 -13.0
-9.6 -9.0 -8.1 -6.4 -5.7 -5.0 -4.7 -4.3 -4.2 -3.8 -3.3 -3.2
-0.2
14.2
30.1
54.1
(30)
(20)
(10)
0
10
20
30
40
50
60
Pe
r
c
e
n
t
Selected Sector Year-Over-Year Total Returns
20Lynwood Successor Agency - Page 26 of 31
Economic and Market Update
Source: Bloomberg, FHN Main Street
7/31/2022
2.50
2.60
2.70
2.80
2.90
3.00
3.10
3.20
6/
3
0
/
2
2
7/
1
/
2
2
7/
2
/
2
2
7/
3
/
2
2
7/
4
/
2
2
7/
5
/
2
2
7/
6
/
2
2
7/
7
/
2
2
7/
8
/
2
2
7/
9
/
2
2
7/
1
0
/
2
2
7/
1
1
/
2
2
7/
1
2
/
2
2
7/
1
3
/
2
2
7/
1
4
/
2
2
7/
1
5
/
2
2
7/
1
6
/
2
2
7/
1
7
/
2
2
7/
1
8
/
2
2
7/
1
9
/
2
2
7/
2
0
/
2
2
7/
2
1
/
2
2
7/
2
2
/
2
2
7/
2
3
/
2
2
7/
2
4
/
2
2
7/
2
5
/
2
2
7/
2
6
/
2
2
7/
2
7
/
2
2
7/
2
8
/
2
2
7/
2
9
/
2
2
7/
3
0
/
2
2
7/
3
1
/
2
2
Pe
r
c
e
n
t
5 Year Treasury Note Yield
Fed Hikes Rates
0.75%
Q2 GDP -0.9%
Second Consecutive
Quarterly Decline
June CPI +1.3%
Strong Jobs Report,
Will Likely Keep Fed
Aggressive Against
InflationFOMC Minutes Show
More Restrictive Rates
May Be Needed
Philly Fed Index Drops
to -12.3
21Lynwood Successor Agency - Page 27 of 31
Economic and Market Update
NI USS
Source: Bloomberg, FHN Main Street
7/31/2022
30,000
30,500
31,000
31,500
32,000
32,500
33,000
6/
3
0
/
2
2
7/
1
/
2
2
7/
2
/
2
2
7/
3
/
2
2
7/
4
/
2
2
7/
5
/
2
2
7/
6
/
2
2
7/
7
/
2
2
7/
8
/
2
2
7/
9
/
2
2
7/
1
0
/
2
2
7/
1
1
/
2
2
7/
1
2
/
2
2
7/
1
3
/
2
2
7/
1
4
/
2
2
7/
1
5
/
2
2
7/
1
6
/
2
2
7/
1
7
/
2
2
7/
1
8
/
2
2
7/
1
9
/
2
2
7/
2
0
/
2
2
7/
2
1
/
2
2
7/
2
2
/
2
2
7/
2
3
/
2
2
7/
2
4
/
2
2
7/
2
5
/
2
2
7/
2
6
/
2
2
7/
2
7
/
2
2
7/
2
8
/
2
2
7/
2
9
/
2
2
7/
3
0
/
2
2
7/
3
1
/
2
2
Dow Jones Industrial Average
Big Tech Firms Plan To
Slow Hiring
Fed Hikes Rates 0.75%June Retail Sales
Beat Expectations
Fed Chair Powell
Doesn't See
Recession As Likely
US And Chinese
Officials Discuss
Rolling Back Tariffs
Nord Stream Pipeline To
Restart Gas Flow From Russia
To Europe
Bullard And Waller
Downplay Recession
Fears
22Lynwood Successor Agency - Page 28 of 31
KEY POINTS
Nonfarm payrolls rose 528,000 for the month and the unemployment rate was 3.5%, easily topping the
Dow Jones estimates of 258,000 and 3.6%, respectively.
Wage growth also surged, as average hourly earnings jumped 0.5% for the month and 5.2% from a year
ago, higher than estimates.
Traders are now pricing in a higher likelihood of a 0.75 percentage point hike for the next Federal Reserve
meeting in September.
Hiring in July was far better than expected, defying multiple other signs that the economic recovery
is losing steam, the Bureau of Labor Statistics reported Friday.
Nonfarm payrolls rose 528,000 for the month and the unemployment rate was 3.5%, easily topping
the Dow Jones estimates of 258,000 and 3.6%, respectively. The unemployment rate is now back to
its pre-pandemic level and tied for the lowest since 1969, though the rate for Blacks rose 0.2
percentage point to 6%.
Wage growth also surged higher, as average hourly earnings jumped 0.5% for the month and 5.2%
from the same time a year ago. Those numbers add fuel to an inflation picture that already has
consumer prices rising at their fastest rate since the early 1980s. The Dow Jones estimate was for a
0.3% monthly gain and 4.9% annual increase.
More broadly, though, the report showed the labor market remains strong despite other signs of
economic weakness.
“There’s no way to take the other side of this. There’s not a lot of, ‘Yeah, but,’ other than it’s not
positive from a market or Fed perspective,” said Liz Ann Sonders, chief investment strategist at
Charles Schwab. “For the economy, this is good news.”
Markets initially reacted negatively to the report as traders anticipated a strong counter move from
a Federal Reserve looking to cool the economy and in particular a heated labor market. However,
the Dow Jones Industrial Average ended the day positive, rising about 74 points following a day of
choppy trading.
Leisure and hospitality led the way in job gains with 96,000, though the industry is still 1.2 million
workers shy of its pre-pandemic level.
Professional and business services was next with 89,000. Health care added 70,000 and government
payrolls grew 57,000. Goods-producing industries also posted solid gains, with construction up
32,000 and manufacturing adding 30,000.
Retail jobs increased by 22,000, despite repeated warnings from executives at Walmart, Target and
elsewhere that consumer demand is shifting.
Lynwood Successor Agency - Page 29 of 31
A more encompassing view of unemployment that includes those holding part-time jobs for
economic reasons as well as discouraged workers not looking for jobs was unchanged at 6.7%.
Despite downbeat expectations, the July gains were the best since February and well ahead of the
388,000 average job rise over the past four months. The BLS release noted that total nonfarm
payroll employment has increased by 22 million since the April 2020 low when most of the U.S.
economy shut down to deal with the Covid pandemic.
Previous months’ totals were revised slightly, with May raised by 2,000 to 386,000 and June up
26,000 to 398,000.
“The report throws cold water on a significant cooling in labor demand, but it’s a good sign for the
broader U.S. economy and worker,” Bank of America economist Michael Gapen said in a client note.
The BLS noted that private sector payrolls are now higher than the February 2020 level, just before
the pandemic declaration, though government jobs are still lagging.
The unemployment rate ticked down, the result both of strong job creation and a labor force
participation rate that declined 0.1 percentage point to 62.1%, its lowest level of the year.
Economists have figured job creation to begin to slow as the Federal Reserve raises interest rates to
cool inflation running at its highest level in more than 40 years.
The strong jobs number coupled with the higher-than-expected wage numbers led to a shift in
expectations for September’s expected rate increase. Traders are now pricing in a higher likelihood
of a 0.75 percentage point hike for the next meeting, which would be the third straight increase of
that magnitude.
“One the one hand, it gives the Fed more confidence that it can tighten monetary policy without
leading to a widespread rise in unemployment,” said Daniel Zhao, lead economist for job review site
Glassdoor. “But it also shows that the labor market isn’t cooling, or at least wasn’t cooling as fast as
anticipated. ... At the very least, even though it’s a surprise, I think the Fed is still on track to
continue tightening monetary policy.”
The Fed has raised benchmark interest rates four times this year for a total of 2.25 percentage
points. That has brought the federal funds rate to its highest level since December 2018.
The economy, meanwhile, has been cooling significantly.
Gross domestic product, the measure of all goods and services produced, has fallen for the first two
quarters of 2022, meeting a common definition of a recession. White House and Fed officials as well
as most Wall Street economists say the economy likely is not in an official recession, but the
slowdown has been clear.
“The recession debate at this point is more academic than anything else,” said Sonders, the Schwab
strategist. “You can’t deny that growth has weakened. That’s the only point in bringing up two
quarters of negative growth in GDP.”
Lynwood Successor Agency - Page 30 of 31
The Fed rate hikes are aimed at slowing the economy, and in turn a labor market in which job
openings still outnumber available workers by a nearly 2-to-1 margin. Bank of America said this
week that its proprietary measures of labor market momentum show an employment picture that is
still strong but slowing, due in large part to central bank policy tightening.
The biggest reason for the retrenchment has been inflation that has been much stronger and more
persistent than most policymakers had anticipated. Prices jumped 9.1% in June from a year ago, the
fastest rate since November 1981.
Correction: Prices jumped 9.1% in June from a year ago. An earlier version misstated the month.
Lynwood Successor Agency - Page 31 of 31