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Trading the Muni Spring Sell-Off

Tuesday, 18 Jun 2013 | 12:47 PM ET
Trading the Muni Spring Sell-Off
Tuesday, 18 Jun 2013 | 12:22 PM ET
After three weeks of historic outflows from municipal bonds, Alexandra Lebenthal explains where she sees them going next.

After three weeks of historic outflows from municipal bonds, Alexandra Lebenthal explained Tuesday what's next.

"I think one of the things that people need to consider right now is if they believe that the market is going to continue to sell off, your first loss is your best loss, and take your money out of funds and put it into short-term bonds or into a money market at this point," she said.

On CNBC's "Fast Money," the president and CEO of Lebenthal & Co. said that she didn't see the economy strong enough for the Federal Reserve to begin tapering of its $85 billion-per-month asset purchases.

Lebenthal also said that were the Fed to end quantitative easing, all fixed-income securities would fall in value and yields would increase.

She also noted that there was a lot of muni bond issuance in the works, which would typically be at cheaper rates.

"I think as the summer goes, we'll see what happens now if rates do get to a point where they become more attractive, and I do think at some point you'll see a rally in here," she said.

Trader disclosure: On June 18, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Weiss is long ZTS; Steve Weiss is short ZTS Puts; Steve Weiss is short X; Steve Weiss is long C ; Steve Weiss is long BAC; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long AAPL; Joe Terranova is long SPLK; Joe Terranova is long GLD; Joe Terranova is long TBT; Joe Terranova is long SWN; Joe Terranova is long GOOG JUNE 870 PUTS; Joe Terranova is long GS JUNE 165 PUTS; Joe Terranova is short MINI S&P FUTURES; Simon Baker is funds long TWI; Simon Baker is funds long AAPL; Simon Baker is funds long BBY; Simon Baker is funds long CELG; Simon Baker is funds long GLW; Simon Baker is funds long XLF; Simon Baker is funds long F; Simon Baker is funds long GS; Simon Baker is funds long GOOG; Simon Baker is funds long MON; Simon Baker is funds long T; Simon Baker is funds long BAC; Simon Baker is funds long GE; Simon Baker is funds long IYM; Simon Baker is funds long JNJ; Simon Baker is funds long MSFT; Simon Baker is funds long MS; Simon Baker is funds long QCOM; Simon Baker is funds long DIS.

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