Weekly News (August 30, 2023)

Mortgage Interest Rates Review

(United Mortgage Nation  8/30/2023)

Federal Fund Rate: 5.25% -5.50%        Prime Rate: 8.25%-8.50%

Wall Street Weighs “WeWork” Potential Bankruptcy Filing: 위웍, 파산선고 가능

(WSJ  8/25/23)

• After WeWork raised doubts about its ability to stay in business a few weeks ago, fund managers including BlackRock, King Street Capital and Brigade Capital are holding preliminary talks about the company’s restructuring options and indicated they would support a plan for it to file for chapter 11 bankruptcy, the people said.
• Since the end of 2019, We-Work amended or canceled hundreds of its leases, resulting in an estimated reduction of $12.7 billion in fixed lease payments, according to securities filings. Still, the company’s chief has said the cost of rent and low occupancy remain the company’s main challenge.

Index of Housing Prices Was Unchanged in June: 7월 주택가지수 변동 없이

(WSJ  8/30/23)

• Home prices held steady from a year earlier in June as high mortgage rates kept both buyers and sellers on the sidelines. The Case-Shiller Home Price Index was unchanged year-over-year in June, compared with a 0.4% annual decrease the prior month.
• On a month-over-month basis, the index rose a seasonally adjusted 0.7% in June, the fifth straight monthly increase. The median existing-home sale price rose 1.9% in July from a year earlier to $406,700, according to NAR.
• Chicago had the fastest annual home-price growth in the country, at 4.2%, followed by Cleveland, at 4.1%. The weakest market was San Francisco, where prices fell 9.7% on an annual basis.

Case-Shiller Home Price Index

Owners Forgo Home Insurance: 집 보험을 주택소유주도

(WSJ   8/29/23)

• Homeowners are increasingly forgoing home insurance, gambling that the likelihood of a disaster isn’t high enough to justify the cost of a policy. Some skipping insurance said they are doing so because they can no longer afford the rising premiums. The national average for home insurance based on $250,000 in dwelling coverage increased this year to $1,428 annually, up 20% from 2022, according to Bankrate.
• If a homeowner has a mortgage and doesn’t purchase insurance, the lender will typically buy lender-placed insurance for that property, said David Sampson of the American Property Casualty Insurance Association. Lender-placed insurance is generally more expensive than the coverage homeowners would buy for themselves, financial advisers said.

Higher Rates Loom over Market: 주식시장을 제어를위해 이자률 상승 필요 

(WSJ    8/28/23)

• Jerome Powell’s much-anticipated speech Friday did little to resolve the conflict gripping markets late this summer: whether a rapid climb in interest rates spells doom for the surprising 2023 stock-market rally.
• The Federal Reserve chair said in his address at the Kansas City Fed’s annual symposium that inflation remains too high and officials are open to raising rates again if needed.
• Rising interest rates threaten share prices by offering investors competing ways to earn a return—a major shift in the financial landscape after years of rock-bottom rates led many to believe there were no meaningful alternatives to stocks.

How High a Rate Can Housing Take?: 주택시장이 얼마나 높은 이자까지 견딜수 있을까?

(WSJ  8/24/2023)

• The highest mortgage rates in a generation should be crushing America’s home-building sector. Instead, they are helping it for now—a bright spot for the U.S. economy.
• On Wed. the Commerce Dept reported that a seasonally adjusted 714,000 new homes were sold in July, at an annual rate, which compared with 684,000 in June and 543,000 in July last year. This was well below the 1.03 million clocked in August 2020, when home buying was surging.
• One reason new-home sales rebounded is probably that buyers got somewhat used to seeing higher rates. The other is that, because most current homeowners are paying much lower rates than what is prevailing now, they are hesitant to move.

Inventory of existing single-family homes for sale, monthly
    

The Fed is ready raise another 0.25%: 금리 추가인상 준비돼 있어   

(Korea Times  8/28/23)

• Jerome Powell, chairperson of the Fed said at the Jackson Hall Symposium in Kansas city on 25th that they are ready to raise the fund rate in order to keep down the inflation rate 2% level.
• He pointed out that the inflation rate curtailed significantly from 9.1% in June, 2022 to 3.2% in July, 2023, but it is only the beginning of the establishing the reliable, confident fact of controlling inflation rate.
• His comment pressed down the discussion on that we should target 2% inflation rate all the way or not.

Nvidia Revenue Surges to Record on Strength of AI Chip Demand: AI 칩 수요로 엔비디아 실적 기록

(WSJ  8/24/23)

• Chip makerNvidiasaid revenue in its recently completed quarter more than doubled from a year ago, setting a new company record, and projected that surging interest in artificial intelligence is propelling its business faster than expected.
• Nvidia is at the heart of the boom in artificial intelligence that made it a $1 trillion company this year.
• The growing attention on artificial intelligence in society and business has also put Nvidia under a sometimes uncomfortable spotlight.  The U.S. last year placed export controls on advanced AI chips sold to Chinese companies—a move that mostly impacted Nvidia, given its leadership in those kinds of chips.

Shein Strikes Deal with Forever 21: “샤인” 이 퍼에버 21 과 협력관계 맺을…   

(WSJ    8/25/23)

• SheinandForever, the two rivals have entered into a partnership that paves the way for the Asian e-commerce powerhouse to sell Forever 21 dresses, jeans and accessories on its site. In future, Shein shops could operate inside Forever 21 stores, the companies said.
• In the deal, Shein is acquiring roughly one-third of Forever 21’s operator,Sparc Group.Sparc, in turn, is taking a minority stake in Shein, which was valued at $66 billion in a funding round earlier this year.
• Forever 21 will gain access to Shein’s 150 million customers, giving it a wider platform to reboot since it was bought out of bankruptcy in 2020. The arrangement could also allow customers to return items ordered from Shein at Forever 21’s stores. The brand has 560 stores worldwide, with 414 in the U.S.