Mortgage Rates Top 6% for the First Time Since 2008

MARKET MOVERS

• Mortgage rates top 6% for the first time since the 2008 financial crisis. The average rate on a 30-year fixed mortgage climbed to 6.02% this week, up from 5.89% last week and 2.86% a year ago, according to a survey of lenders released Thursday by mortgage giant Freddie Mac. The last time rates were this high was in the heart of the financial crisis almost 14 years ago, when the U.S. was deep in recession.

• Figma’s record-breaking sale to Adobe delivers billions to top VCs. Adobe Inc. said it will buy Figma in a deal valued at about $20 billion — the largest exit of a VC-backed company in at least 20 years, according to PitchBook data. Co-founder and CEO Dylan Field, 30, is now of legal drinking age in the US, and both he and Danny Rimer stand to make a lot of money from the sale.

• The White House just put out a framework for regulating crypto. The new directives tap the muscle of existing regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, but nobody’s mandating anything yet. The framework also points to the potential for “significant benefits” from a U.S. central bank digital currency, or CBDC. Read more here.

• U.S. retail sales rose 0.3% in August. The gain outpaced inflation and marked a reversal from July’s 0.4% decline. Broadly, consumers are able to increase their spending a bit, when factoring in rising prices. Shoppers had some additional wiggle room in August because of falling gasoline prices. Americans spent less at gasoline stations last month and more in many other categories.

• U.S. railroad strike averted as a tentative deal is reached, Biden says. The biggest freight railroads and union leaders reached a tentative labor agreement to avert a nationwide strike. President Biden and White House officials interceded to broker a deal to avoid transport disruptions that could have snarled supply chains, putting new pressure on prices when inflation has been hovering near four-decade highs. Read more here.

WHAT TO WATCH

• Volkswagen set for a multimillion-euro windfall on huge gas trade. The car company is set to receive hundreds of millions of euros in trading profits as it offloads a massive natural-gas hedge, selling large amounts of fuel it previously purchased back into the German market. Europe’s largest car-maker has directed the sale of 2.6 terawatt-hours worth of gas contracts, according to a document seen by Bloomberg News.

• BofA top banker Rick Sherlund predicts a breakout in mergers due to the troubled economy. He sees a wave of struggling companies putting themselves up for sale at cheaper prices due to the economic downturn. He says that companies will have their valuation expectations soften, and that will combine with more fully functional financial markets. He thinks it will accelerate the pace of M&A.

• Several analysts bail on FedEx after the delivery giant’s earnings warning. The transportation giant got hit by a wave of downgrades after it withdrew its outlook for the year and shared a slew of initiatives aimed at cutting costs amid a softening shipping environment. Analysts believe FDX will continue trading at a depressed multiple until earnings stabilize with some potential help from cost-saving initiatives. Read more here.

• A further 27% drop in the S&P 500 could be coming if inflation hawks are right, the Goldman Sachs team warns. In the more severe scenario where the jobless rate would have to hit 6%, the S&P 500 would fall 27%, to below 2,900, the yield on the 5-year Treasury would climb 182 basis points, and the dollar would rise 8%. That severe scenario implies a tightening of financial conditions comparable to the global financial crisis of 2008.

• Liz Truss prepares fresh bid to persuade SoftBank to list Arm in London. Truss and her chancellor Kwasi Kwarteng are pushing for high-level talks with Arm’s owner SoftBank. SoftBank suspended plans for a rare dual listing in London and New York this summer. It was worried about political turmoil in the UK under then-prime minister Boris Johnson. SoftBank is expected to make a decision on where to list in the next couple of months. Source(3:00)