MARKET MOVERS
- WHO declares the rapidly spreading monkeypox outbreak a global health emergency. The rare designation means the WHO now views the outbreak as a significant enough threat to global health that a coordinated international response is needed. The WHO last issued a global health emergency in January 2020 in response to the Covid-19 outbreak. Europe is the epicenter of the outbreak. Read more here.
- Russia strikes Odessa port after signing a deal to unblock Ukrainian grain exports. The attack on Odessa appeared to violate the terms of the United Nations-brokered agreement signed by Russia and Ukraine in Istanbul on Friday, which stipulated that both countries would refrain from attacking port facilities or civilian ships used for grain transport. Read more here.
- The dollar’s record rally is hitting companies this earnings season. The carnage from the rally is expected to continue to hit some of the highest-profile companies with strong overseas businesses as they grapple with foreign exchange headwinds that could cut into profits. Technology stocks are among the biggest behemoths so far to report headwinds from the dollar’s strength this earnings season. Read more here.
- Volkswagen’s CEO Diess steps down. That hurts its EV ambitions. Diess is a champion of vehicle electrification and pushed the company to spend billions on EV development and battery capacity. Losing Diess could hinder the speed at which some of that change occurs. He will step down effective September 1, 2022, by mutual agreement. Dr. Oliver Blume will take on the role of CEO and, at the same time, his role as CEO of Porsche AG.
- WWE CEO Vince McMahon retires. Vince McMahon announced his retirement from World Wrestling Entertainment Inc. on Friday, officially leaving the company that he built. McMahon has been embattled of late, taking a leave of absence from the helm of WWE amid reports that he had an affair with a worker and paid millions in hush money to cover it up. McMahon’s daughter, Stephanie McMahon, had taken over his position as Co-CEO along with Nick Khan.
- The number of homes for sale is getting stale. For the week ending July 16, new listings dropped by 3% year over year—the second straight week of declines. This downward dip may come from panicked home sellers worried that the seller’s market that has showered them in bidding wars over the past two years might be waning. Meanwhile, housing inventory overall rose by 29% over a year earlier but a larger portion of these homes for sale are “stale” ones that many buyers have already picked through and passed over.
- Roughly 60% of the U.S. could be frozen out of starter homes, warns S&P. The report gauged affordability as topping out when mortgage payments reach 25% of a household’s income. Specifically, the bottom one-fifth bracket, or households making up to about $27,000 a year, would need to spend at least 100% of their income to afford a monthly mortgage payment, according to the report.
WHAT TO WATCH
- A big change appears to be looming for rental prices. While rents continued to shoot up the growth in prices is slowing down. June saw the lowest year-over-year growth in prices of the year. It’s also a shift from January when rents shot up 17.6% compared with a year earlier. As things start to get back to normal in real life, things will start to get back to normal in the rental market too.
- TSMC says the industry is undergoing an inventory correction. Prices of memory chips used in many electronic gadgets have fallen while semiconductors used in cars and data centers are still in high demand. Some companies are preparing for a sales slowdown. TSMC acknowledged that the broader industry is dealing with an inventory correction that has led customers to cur orders from its peers after two years of pandemic-driven demand. It will take a few quarters to rebalance. Source(44:32)
- California truckers shut down California port in protest of gig worker law. This could throw an improving supply chain into reverse. The truckers are planning to keep cutting off access to the third-busiest port on the West Coast until Democratic Governor Gavin Newsom agrees to sit down and hear their qualms with AB5, the controversial gig worker bill that’s expected to go into effect later this year.
