MARKET MOVERS
- We have been in a supply-side recession, says Chamath Palihapitiya. This is what has caused inflation. We have to go through a process of taking all the excess money that's been put in and putting it out and when you do that, we will destroy demand. That will trigger a demand-side recession and will destroy asset values. The population overspending right now will have to cut spending if their balance sheets take a hit. Source(23:43)
- Mortgage rates see the largest drop since December 2008. The 30-year fixed-rate mortgage averaged 5.3% for the week ending July 7, according to data released by Freddie Mac on Thursday. That’s down 40 basis points from the previous week. Over the last two weeks, the 30-year fixed-rate mortgage dropped by half a percent, as concerns about a potential recession continue to rise.
- Housing inventory in June rose 19% on an annual basis. However, home values are still holding strong despite added listings. While the housing supply crunch may finally be easing, home values are still holding steady. In June, the median listing price hit another record high of $450,000, Those looking to sell a home may not want to wait.
- The strong dollar wins the inflation battle in a new spin on currency wars. The greenback is just over 1 cent from parity with the euro for the first time since 2002, and the strongest against the yen since 1998. Adjusted for inflation, the dollar has been stronger when weighed against the country’s trading partners only twice, in 2002 and 1985. The dollar’s been powered up by the combination of economic logic and monetary support. Read more here.
- The US crosses the electric-car tipping point for mass adoption. Once 5% of new-car sales go fully electric, everything changes — according to a Bloomberg analysis of the 19 countries that have made the EV pivot. If the US follows the trend established by 18 countries that came before it, a quarter of new car sales could be electric by the end of 2025. That would be a year or two ahead of most major forecasts. Read more here.
- Gas prices have fallen for 24 straight days. The drop is primarily because of diminished demand at the pump, according to a AAA report released this week. An increased supply of gas and lower oil prices have also contributed to the recent price drop. Gas prices may continue to fall if the trends continue. However, July is typically the heaviest month for demand as more Americans hit the road, so this trend of easing prices could be short-lived.
- Renters face the fiercest competition in Florida and the Northeast. The demand for apartments in Florida has intensified, followed by markets in Pennsylvania and New Jersey, as Americans embrace remote work. As pandemic restrictions ease and remote work become a permanent fixture, Americans continue to seek homes in communities with more relaxed lifestyles.
- Active funds are on top again. It took a bear market to put them there. Just over half of U.S. stock funds outperformed the average passive portfolio for the year through May, compared with 45% in 2021. While that figure might not quite sound boast-worthy, the average is dragged down by ongoing struggles among active growth fund managers—less than 30% of whom have managed to beat their passive counterparts’ average returns. Read more here.
WHAT TO WATCH
- Gold forms an ominous ‘death cross’ pattern as it takes a strong dollar hit. The breach is the latest signal that gold, which has fallen to levels not seen since 2021, is in trouble. Rising bond yields and expectations of tighter monetary policy from the Federal Reserve to combat inflation have boosted the greenback. And that’s bad news for gold. Read more here.
- Home prices may still rise, but car values are set to fall from the pandemic peak. Goldman Sachs expects U.S. home prices to edge up to new post-pandemic highs, despite a near doubling of the 30-year mortgage rate. On the other hand, prices for used cars already have shown signs of normalizing as supply chains untangle and dealer inventories restock.
- Shiba Inu could be launching more projects on its network. The lead developer of Shiba Inu, Shytoshi Kusama, said in a blog post that Shiba Inu is planning to launch a stablecoin project called Shi, a reward token, and a new set of collectibles for the metaverse. Shiba Inu's reward token will be called "Treat." The purpose of this token is to help the stablecoin retain its peg.
