MARKET MOVERS
- Mortgage rates rise above 4% for the first time since 2019. Mortgage rates are closely tied to the yield on the 10-year U.S. Treasury, which tends to rise in tandem with the Fed’s benchmark rate. Rising borrowing costs pose another challenge for would-be homeowners already facing soaring home prices. An average rate of around 4% is sharply higher than the sub-3% rates that were available for much of last year.
- Home sales fell far more than expected in February. Existing home sales in February fell a much wider than expected 7.2% month to month. The median price for an existing home sold in February was $357,300, an increase of 15% from a year ago. Tight supply and strong demand continued to push prices higher. Regular homebuyers are facing steep competition from investors. The investor share of sales in February was 19%.
- Housing starts made gains in February despite constraints. American homebuilders tallied 1,769,000 new housing starts in February 2022, a 6.8% uptick from January, according to data released Thursday by the US Census Bureau. The strong showing for new starts in the face of bottlenecks and setbacks is likely fueled by the strong demand for new homes in a housing market with fewer than 1 million existing homes for sale.
- Demand for vacation homes is dropping. Rising mortgage rates may be tamping down demand for second homes, which reached its lowest level in February since May 2020, new Redfin research shows. Meanwhile, the FHFA fees for such loans will rise from about 1% to 4% starting in April. Still, second-home demand, based on the number of mortgage rate lock-ins, remains 35% higher than before the pandemic.
- Single-family rents jump to record highs. The demand for single-family rental homes is climbing, sending rental prices soaring. The annual gain in single-family rents rose to a record level of 12.6% in January, the fastest yearly increase in more than 16 years of reporting. The Sun Belt is posting the largest increases. Single-family rents in Miami increased 38.6%. Orlando, Fla. at 19.9%, and Phoenix posted an 18.9% rise. Read more here.
- War is the real market driver, not the Fed. Josh Brown says the Ukraine-Russia conflict is more meaningful to markets than the Fed right now. The bond market has already tightened 7 times for the Fed so there's little Powell could do other than a 50 basis point hike that would shock anybody. The real surprises are coming from the war and the price of oil as a result. Source(54:24)
WHAT TO WATCH
- Dan Niles predicts a recession. The Satori Fund manager said he sees multiple, “very strong indicators” pointing toward a recession next year. Niles pointed to multiple indicators from soaring inflation to a flattening U.S. Treasury yield curve represented by a smaller gap between the 2-year note’s yield and 10-year note. He thinks the Fed has waited so long to deal with inflation. Read more here.
- House passes bill to revoke normal trade relations with Russia, Belarus. If made a law, it will allow the Biden administration to impose new higher tariffs on products from Russia and Belarus until Jan. 1, 2024. The U.S. Trade Representative will also be able to seek suspension of Russia’s participation in the World Trade Organization (WTO) and to halt Belarus’ WTO accession and accession-related work.
- Porsche increases EV targets, confirms 911 hybrid sports car. Porsche on Friday announced it expects 80% of its global sales to be all-electric vehicles by 2030. The company’s next two EVs are expected to be the Macan SUV in 2023, followed by the 718 sports car by 2025. They also confirmed a hybrid version of its 911 sports car is coming, but he did not disclose a timeframe for its release. Read more here.
- Maserati is launching an EV ahead of Ferrari. It's a challenge to Tesla's Model S. Maserati is planning to sell a new, all-electric, GranTurismo Folgore by 2023. Ferrari is planning its first all-electric vehicle for 2025. The car will come with a planned 1,200 horsepower, almost 200 more than a Tesla Model S Plaid edition. All Maserati models will have EV options by 2025, while the brand plans to be all-electric by 2030. Read more here.
- Nvidia might have a catalyst next week. Chipmaker Nvidia will host its flagship technical conference called GTC next Monday to Thursday, with the keynote from CEO Jensen Huang coinciding with the company’s investor day on Tuesday. Expected announcements are the new 5-nanometer processing units for use in data centers, new opportunities expected for Nvidia’s Omniverse, and an update on the sales pipeline linked to the growing Chinese electric-vehicle industry.
