Weekly Market Update
U.S. FOURTH-QUARTER GROWTH REVISED DOWN TO 2.5%
Thursday, March 1, 2018
On Wednesday, the Commerce Department revised last quarter's U.S. economy growth rate downward, primarily due to inventories lower than previously estimated. Although the revision lowered GDP from the initial estimate of 2.6% to 2.5%, the latest results for GDP showed the economy ending the year on a solid note. Household and business spending remained robust, and consumer spending, the biggest contributor to the economy, was unrevised at a 3.8% growth rate. With the tax cuts in effect, economists are waiting to see if companies and consumers will spend that extra cash within the U.S. This pace of GDP growth will likely justify higher interest rates from the Federal Reserve this year. The Commerce Department will release another GDP report next month for the final quarter of 2017 when it has more complete data.
In Other News
- Lasell College and Mount Ida College are in discussions about a possible merger, the Newton, MA-based liberal arts schools announced over the weekend. In a joint statement, the presidents of Mount Ida and Lasell said they had formed a committee to consider a merger and hoped to sign an agreement "within a few months."
- Vanderbilt University Medical Center on Monday said it has partnered with the University of Mississippi Medical Center to collaborate in clinical services, medical research and other areas.
- Individuals with high state and local tax bills appear to be bidding up prices of municipal bonds. Due to recently revised federal tax law capping certain deductions at $10,000 a year, the tax-exemption is relatively more attractive than under previous tax law.
- Federal Reserve Chairman Jerome Powell offered an upbeat view of the economy today and indicated that the central bank expects to maintain gradual increases of short-term interest rates this year and beyond.
- The University of Texas endowment fund is reviewing its gold holdings, worth about $1 billion. Britt Harris, the new CEO at Utimco, stated, "We're in no rush to sell, but it may not be a long-term strategic hold."
- Last week, the city of Medford, Oregon adopted an excise tax on new construction to help fund new affordable housing. The tax is one-third of 1% of building permit fees on major residential, commercial, and industrial development projects.
Rating Agency Update
- Moody's assigned Aa3 to University of Connecticut's Series 2018A Student Fee Bonds. The outlook is negative.
- Moody's raised Western Michigan University's rating from A1 to Aa3. The outlook is stable.
- Moody's lowered Longwood University's rating from A3 to Baa2. The outlook is negative.
- Moody's assigned A1 to Central Washington University's Series 2018 System Revenue Bonds. The outlook is stable.
- S&P assigned BBB+ to Meredith College's Series 2018 Educational Facilities Revenue Refunding Bonds. The outlook is stable.
- S&P affirmed St. Bonaventure University's BBB rating. The outlook is stable.
- S&P assigned A- to the University of Miami's Series 2018A&B Revenue Bonds. The outlook is stable.
- S&P affirmed West Virginia University Foundation's A+ rating. The outlook is stable.
- S&P affirmed The University of Alabama in Huntsville's A+ rating. The outlook is stable.
- S&P affirmed St. Louis College of Pharmacy's BBB rating. The outlook is stable.
- S&P raised Albany College of Pharmacy and Health Sciences' rating from BBB to BBB+. The outlook is stable.
- S&P affirmed Central Michigan University's A+ rating. The outlook is revised from positive to stable.
- S&P affirmed University of South Florida's AA- rating. The outlook is revised from stable to positive.
- S&P affirmed Florida Southern College's A- rating. The outlook is stable.