Weekly Market Update

U.S. EQUITY MARKETS TUMBLE

Thursday, February 8, 2018

U.S. equity markets experienced a significant selloff this past week with the Dow dropping 2,000 points from last week's levels. Market participants asserted that the threat of inflation and increasing bond yields caused the sharp decline. After weakening recently, Treasuries rallied slightly today as equity investors fled to safety. However, the prospect of faster Fed rate increases and weak Treasury auctions led some to predict that the bond market selloff will continue. Stronger economic data contributed to rising Treasury rates : weekly jobless claims hit a 45-year low, down to 221,000 from 230,000 last week.

In Other News

  • Higher education groups have begun to speak out against the PROSPER Act, the House Republican update to the Higher Education Act. The Association of Public and Land-grant Universities noted that the proposed bill would make college less accessible and affordable.
  • U.S. colleges benefited from a record $43.6 billion in contributions in fiscal 2017, up 6.3% from 2016. Some industry participants believe that fundraising may struggle in 2018 due to changes in the recent federal tax overhaul, including an increase in the standard deduction.
  • New details have emerged surrounding the Robert W. Woodruff Foundation's $400 million gift to Emory University. The funds will support health initiatives including biomedical research and new cancer research and treatment facilities.
  • Thirteen universities in Canada, Mexico, and the United States formed a new coalition focused on climate change. The coalition's aim is to encourage local action and demonstrate leading research institutions' capacity for climate leadership.
  • Carolinas Health Care has renamed itself Atrium Health as it awaits approval for its merger with UNC Healthcare. The merger is currently under review by the State of North Carolina and has drawn opposition from North Carolina's largest insurer, Blue Cross and Blue Shield of North Carolina.
  • Municipal bonds endured a selloff last week, driven by the slumping Treasury market. Interest rates increased as investors fear that the Fed may raise rates more aggressively than previously planned.

Rating Agency Update

  • Moody's affirmed Marymount University's Ba1 rating. The outlook is stable.
  • Moody's assigned Aa3 to Wayne State University's Series 2018A Revenue Bonds. The outlook is revised to stable from negative.
  • S&P assigned A+ to Wayne State University's Series 2018A Revenue Bonds. The outlook is stable.
  • Moody's downgraded Shawnee State University to Baa2 from Baa1. The outlook is negative.
  • Moody's assigned Aa3 to Boise State University's Series 2018A Revenue Bonds. The outlook is stable.
  • S&P assigned A+ to Boise State University's Series 2018A Revenue Bonds. The outlook is stable.
  • S&P affirmed The New School's A- rating. The outlook is stable.
  • S&P affirmed The Art Institute of Chicago's AA- rating. The outlook is stable.
  • S&P assigned A+ to the University of Central Florida's Series 2018A Revenue Bonds. The outlook is stable.
  • S&P assigned A+ to Baylor University's Series 2018 Bonds. The outlook is stable.
  • S&P affirmed Westminster College's BBB rating. The outlook is stable.
  • S&P affirmed Xavier University's BBB+ rating. The outlook is revised to positive from stable.
  • S&P affirmed Columbia College's BBB+ rating. The outlook is stable.