Weekly News (September 6, 2023)

Mortgage Interest Rates Review

(United Mortgage Nation  9/6/2023)

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

Bergen Light Rail Extension might be terminated: 버겐카운티 경전철 연장 물거품 되나?

(WSJ  9/1/2023)

• The federal government is objecting the Bergen Light Rail Extension project which took 30 years to plan and study.
• The Department of Transportation rejected the notice of intent for the environmental study of the project, which means NJ Transit will have to re-submit the environmental study report again. New study will take about 2 years.
• The part of reason is that NJ State doesn’t have enough fund for project unless the federal fund allocates the majority of the fund which might need $2B. NJ Transit will do the environmental study again and seek for the funding source as well.

CJ Food builds the 1st Factory in Gainesville,GA:  CJ 푸드빌, 첫 미국 공장 조지아주로 확정

(Korea Times  9/6/23)

• Tous Les Jours operated by CJ Foodville expands its operation to GA and announced the plan to build the factory in Gainesville, GA – 35 min driving distance form C Land GA office.
• CJ Foodville also announced that they will increase their stores to 1000 in U.S. by 2030 and the factory in GA will be the distribution center for those stores. They had launched the operation in 2004 in U.S. and began franchising business in 2009, and made breakeven in 2018.
• The 1st U.S. factory in Gainesville will take 22.2 Ac lot and the cost will be $37.92M. They will do groundbreaking in this year.

China’s Malaise Should Worry Neighbors: 중국 경제의 악화가 주위 나라를 걱정시켜

(WSJ   9/5/23)

• China’s economic troubles have so far been a boon to other Asian markets. But if the world’s second-largest economy continues to turn sour, things could start to look uglier for them, too.
• Major Asian stock markets have been doing well in 2023. Japan’s Topix index has gained 24% this year while Taiwan’s Taiex index has risen 18% and Korea’s Kospi is up 15%. That is in contrast to Chinese stocks: The MSCI China index has dropped 6%, despite a strong start of the year.
• Goldman Sachs has indicated potential concerns of spillover. China is the top trading partner of many countries in the region like Japan and South Korea, and weak demand from China could ripple through to its neighbors. South Korea’s exports to China, accounting for roughly 20% of its total, fell 25% year over year in the first eight months of 2023.

South Korea’s Monthly exports to China, change from a year earlier

EV Boom Remakes Rural Towns in American South: 전기차 호황으로 미국 남부 마을들 변화

(WSJ    9/1/23)

• The U.S. auto industry is accelerating its move south as car companies pour billions of dollars into new factories in Georgia, Kentucky and Tennessee. The shift is creating pockets of frenzied activity for rural, southern towns bracing for an influx of new workers and residents.
• The auto industry’s geographic shift has been slowly progressing for decades, but has sharply picked up in recent years with the transition to EVs. Automakers are now rush to construct assembly plants and battery-making facilities— some sitting on sites the size of 60 football fields. Auto companies have announced more than $110 billion in EV-related investments in the U.S. since 2018, with about half that sum destined for Southern states, said the Center for Automotive Research, in Ann Arbor, Mich.

Expected new jobs / Motor-vehicle manufacturing, change in employment since 2012

Rents Rise Faster In Suburban After Pandemic Shift: 펜데믹이후, 교외지역 랜트 더 상승

(WSJ  9/6/23)

• America’s suburbs are posting the country’s fastest-rising rents, a sign that the recent migration of families from major cities is starting to look more long term.
• High mortgage rates and home prices are keeping some of the same families renting for longer periods. A rise in crime and homelessness in several big cities has some renters looking to the suburbs.
• Rents in suburbs climbed 26% through this past July since March 2020, 8 percentage points higher than the gain in urban cores, according to a report from rentals website Apartment List. Suburban-rent growth was greater than its urban counterpart in 28 of the 33 metro areas studied, the company said.

Percentage change in asking rent since March 2020:

Resilient Economy Defies Expectation: 탄력있는 미 경제, 예상을 뒤엎어

(WSJ  9/2/23)

• Steady hiring and robust consumer spending offer the latest evidence that the pandemic and the government’s unprecedented policy responses made the economy surprisingly resilient to the Fed’s most aggressive interest- rate increases in 40 years.
• Employers added 3.1 million jobs during the past 12 months, including 187,000 in August, the Labor Department said Friday. The unemployment rate rose to 3.8% from 3.5% in July as more Americans joined the workforce.
• The reasons are:
  1)A growing workforce and slower price increases have boosted Americans’ inflation- adjusted or “real” incomes this year, fueling more hiring and spending.
  2) The unusual nature of the Covid-19 pandemic distorted spending patterns, creating shortages of goods, housing and workers. This created big pent-up demand that has been less sensitive, for now, to higher rates.
  3) The government initially showered the economy with cash and held interest rates at rock-bottom levels, allowing businesses and consumers to lock in lower borrowing costs. Following legislation further boosted federal spending and spurred additional private investment in manufacturing.

Nonfarm payrolls

Debt Service share & Spending /Income change

Shift to EV Gets $12B in Funds: 전기차 공장으로 전환하는 정부 자금 $12B 투여   

(WSJ  9/6/23)

• The Energy Department said it is planning to provide up to $12 billion in funding for automakers to retrofit existing manufacturing facilities in the U.S. for the production of electric and hybrid vehicles ($10B allocated for Loan Program / $2B allocated for IRA).
• The auto industry is plowing billions of dollars into converting factories from building gasoline-engine vehicles to those that run on battery power. The investments have spurred a building boom of new car factories in the U.S., mostly in the South, and have led car companies to pare back in other areas, such as laying off salaried workers and streamlining operations not essential to the EV future.

Home-Rental Company Pretium Taps Ex-Morgan Stanley Executive as President: 임대주택회사(Pretium), 모건 스탠리 중역 고용  

(WSJ  9/6/23)

• Jonathan Pruzan,Morgan Stanley’sformer chief operating officer who had been a contender to succeed Chief Executive James Gorman, is the new president of one of the largest investors and managers of single-family rental houses.
• Pretium ,which has a portfolio of about 100,000 houses in more than 30 markets, hired Pruzan to expand the company when high interest rates and tremors in the banking system have created turbulence in the rental-housing market.
• Founded in 2012, Pretium was one of the leading companies that invested billions of dollars in the single-family home business in the wake of the 2008 housing crisis.