Weekly News (July 3, 2024)

Mortgage Interest Rates Review

United Mortgage Nation  7/3/2024

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

Overvalued Houses are a Warning Sign

WSJ  6/28/24

• Houses are really expensive, and getting more so. Prices jumped 1.2% in April from March, and are now up about 50% from the end of 2019, according to one prominent index.
• It should also be a warning sign. Homes are as overvalued as they were near the peak of the 2000s bubble, according to a variety of metrics, including a Federal Reserve model.  This doesn’t mean a collapse or crisis, like in 2008. Nor is it a reason not to buy a home. As I explained back in 2020, pandemic trends such as remote work have enhanced the noncash return on homeownership.
• But homes are also assets, and overvaluation is a predictor of stagnant, even negative, real returns in coming years, a headwind to anyone counting on real estate as a source of wealth.

Home price to rent and interest rates

WSJ 6/28/24

Residential market doesn’t follow supply-demand open market rule

            주택시장, 기되한 세계 접어들어 

Korea Daily   7/3/24 

• According to Insider, David Rosenburg, CEO of Rosenburg Research, said Supply-demand rule in the residential market isn’t working anymore.
• NAR said the residential sales in May reached to 4.11M which was down 2.8% from April. But available houses in May was up 18.5% from April. Unsold inventory hit 2.9 months in Feb, 3.2 months in March, 3.4 months in April, and 3.7 months in May which marked the highest since June 2020.
• While supply increased and demand decreased, the median house prices went up 5.8% to $419,300 in May.
• He mentioned either prices or interest rates has to be collapsed sooner or later.  Some market experts say house prices might be down in big scale. 

Powell Puts Rate Cuts Back Into View

      연준의장, 금리인하를 다시 고려

WSJ  7/3/24 

• The Fed Chair Jerome Powell said he was pleased with how inflation had resumed a downtrend following a rebound at the start of the year but said it was too soon to say whether the central bank might be able to lower interest rates by the end of the summer, as investors increasingly anticipate. 
• Investors in interest- rate futures markets see a roughly 70% chance that the first Fed cut occurs by September, according to CME Group. 
• To determine whether and when to lower interest rates, officials must balance two risks. The first is that a continuing cooling in the labor market accelerates in a way that is hard to stop once it starts. The second is that lower rates ignite economic activity and allow inflation to settle out above their goal.

Hispanic Growth Propels Population Rise

             라틴계 인구 계속 증가로 전체 인구 증가률에 영항   

Korea Daily   7/3/24 

• The Hispanic  in the U.S. continues to climb, according to the latest census estimates, propelling a slight rise in the overall population while also buttressing metro areas where growth would otherwise stall.
• At the same time, the U.S. continues to grow older as the massive baby-boomer population ages and the number of children declines, according to the Census Bureau. The U.S. Hispanic grew by 1.16M to more than 65M in the recently estimated year, accounting for roughly 70% of overall population growth in that period. The overall population grew less than 1% to nearly 335M.
• The Black grew by about 265,400 in the recent year and the Asian about 466,200. The white population shrank by about 461,600. White made up about 58% of the U.S. by mid-2023, down roughly 1% from 3 years earlier.

Change in U.S. population since 2020

WSJ  6/27/24

Underground Network Funnels Banned Nvidia Chips to China 

   금지된 Nvidia 췹, 중국으로 밀매

Korea Daily  6/7/24

• A connection from college asked a student to bring the chips because the U.S. restricted their export to China. Each chip was roughly the size of a Nintendo Switch game console. Upon arrival, the student said he was paid $100 for each chip he carried, a fraction of the underground- market worth.
• The student is part of a network of buyers, sellers and couriers bypassing the Biden administration’s restrictions aimed at denying China access to Nvidia’s advanced AI chips, WSJ found. 
• The chips the Chinese student carried to China were passed down from a broker in Singapore known as “Brother Jiang,” who is well known among chip distributors and buyers in the region.   

Amazon invests $100B into AI 

      아마존, AI 사업에 1,000억 달러 투자   

Korea Times  7/3/24 

• Amazon who started as logistics and transportation company now is being changed to AI company. 
• Amazon will invest $100B to construct Data Centers, a total of 216 locations,  for the next 10 years which is one of the biggest investment ever Amazon pursued.
• AWS(Amazon Web Service) was running Data Centers and operating for many years in the past, but now it draws big investment because of huge demand for the AI trends.    

Walgreens to Close Stores, Sinking Stock 22%

 월그린 가게들 문 닫는다 – 주식은 22% 하락

WSJ    6/28/24(Fri) 

• Walgreens will close a significant share of its roughly 8,600 stores in the U.S., Wentworth said in an interview with the Journal. The company is reviewing about a quarter of its stores that aren’t profitable and could shutter a “meaningful percent” of those over the next few years.
• Shares of the pharmacy chain plummeted 22.16% to $12.19 Thursday, after WSJ reported CEO’s plans and the company failed to meet Wall Street’s expectations for quarterly earnings and lowered its guidance for the full year. It was the stock’s largest percent decline on record.
• Walgreens is a 123-year-old company and one of the U.S.’s most ubiquitous retailers.  Yet it has struggled for years because of financial pressures in its core pharmacy business.

Walgreens to Close Stores

WSJ 6/28/24