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October
20
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Week In Review

Brexit

At the EU leaders’ summit Merkel offered encouragement for May and said that both sides will need to make concessions in order to reach a deal that avoids a hard Brexit.  This is a softer negotiating stance than that of the EU’s chief negotiator, who complained last week that the talks are deadlocked.

Our Take

The political leaders of the EU member nations, whose voters will hold them accountable for the negative economic impacts of a hard Brexit, appear to be more willing to work toward a deal with the UK than the bureaucrats running the negotiations.


Municipals

Moody’s Investors Service announced that the University of Louisville is under review for a credit downgrade in the wake of the allegations of the recruiting scandal surrounding fired coach Rick Pitino and fired athletic director Tom Jurich.  Moody’s warned that the university’s credit rating could be cut if the recent scandal leads to a decrease in revenue, including donations and enrollment, affecting the school’s financial strength.

Our Take

The scandal will likely have a negative impact on the school’s finances.  According to financial statements, athletics is the University of Louisville’s third largest revenue source.  However, it will take time to determine how much the scandal will affect the university’s finances in terms of enrollment and donors’ willingness to give.  In addition, it is unknown if the NCAA will impose sanctions.

 

All expressions of opinions are subject to change without notice in reaction to shifting market conditions.  All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.  Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.