MARKET MOVERS
- Home price increases slowed for the first time in months in April, says S&P Case-Shiller. Prices rose 20.4% nationally in April compared with the same month a year ago. In March, home prices grew 20.6%. The last slight deceleration was in November of last year. In a change from the last five months, when most of the 20 cities saw month-to-month price gains, only nine cities saw prices rise faster in April than they had done in March.
- U.S. trade deficit in goods falls for the second month in a row after setting a record. The nation’s trade deficit in goods fell 2.2% in May to $104.3 billion. The trade gap in goods fell from $106.7 billion in April and a record $125.6 billion in March, Census Bureau figures show. The record U.S. trade earlier in the year has eased a bit during the spring and is likely to give a boost to GDP, the official scorecard for the economy.
- Record home prices rev up the single-family rental market. Rents for single-family homes rose 14% this April from a year ago, the 13th consecutive month in which rents grew at a record pace, according to housing data provider CoreLogic. The typical earner would have to spend more than 30% of their income on apartment rent has ballooned, rising to 23% from 8%. Read more here.
- Walgreens stock falls after abandoning the sale of retailer Boots. The company will retain the ownership of its U.K.-based Boots retail chain, and No7 Beauty businesses after completing its strategic review. It said that as a result of market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value of Boots and No7 Beauty Company. Read more here.
- Except for the mid-west, most regions saw a peak in pending home sales in August 2020; since then, sales are down by 20% in the south, 18% in the mid-west, 23% in the northeast, and 29% in the west.
- Nike's attempt to take full advantage of its brand power digitally is paying off. Revenue overall rose 5% to $46.7 billion, with double-digit percentage gains for the Nike Direct segment. Digital growth and Nike-branded stores both made significant contributions to the retail company's success. Nevertheless, a big rise in selling and administrative expenses limited earnings growth to 5%. Read more here.
WHAT TO WATCH
- Cathie Wood slashes ARKK’s portfolio to just 34 holdings as her bear market strategy. She believes that the strategy to weather the bear market and manage risk is through consolidation. She told CNBC on Tuesday that since February 2021, the investment firm has cut its portfolio down from about 58 to 34 stocks to focus on its highest conviction names that continue to grow revenue like Zoom, Tesla, and Roku. Read more here.
- Commodity prices are dropping. Analysts believe it's a recession red flag. Many commodity prices—oil, wheat, and copper, for example—are sliding over recession fears. A weaker economy would reduce, in theory, the demand for some commodities. Demand for some metals may end up being a little softer, especially if building activity in China falls off. But the agricultural and energy commodity demand is still there globally.
- JetBlue raises its offer again to buy Spirit Airlines. JetBlue proposed a $400 million breakup fee, which it would pay to Spirit if regulators block the merger, up from the $350 million previously pledged. JetBlue also said it would prepay $2.50 a share once investors approve the deal, up from $1.50. JetBlue has said it is confident it can gain approval to buy Spirit without having to exit its partnership with American Airlines.
- Volkswagen nears deal to sell stake in Electrify America to Siemens. The sale would generate additional funding as part of a plan to more than double the number of EV charging stations that Electrify America operates across the U.S. and parts of Canada to 1,800 by 2026. Reston, Va.-based Electrify America also offers EV charging stations for use at home. Read more here.
- Siemens to buy NC-based Brightly Software for about $1.9 billion. Clearlate Capital Group L.P. announced an agreement to sell North Carolina-based Brightly Software Inc. to the Germany-based diversified technology company for $1.88 billion. The terms of the deal, which is expected to close in the second half of 2022, include $1.58 billion in cash upfront and $300 million in cash earn-out payments.
- The bottom might take a couple more months to actually happen. Francis Gannon thinks we are in an environment where we are not going to get that. He says that if we look at the slowing economy, it is still open and working. There are still pockets of strength and people usually forget that there are regional plusses and minuses in the US given the size of the economy but it's still open and working. Source(21:37)
