US equities continued their seven-week upward trend on Monday, despite efforts by Federal Reserve officials to temper expectations for rate reduction.
The Dow Jones Industrial Average (^DJI) barely managed to set another record closing, remaining essentially unchanged. The tech-heavy Nasdaq Composite (^IXIC) increased by around 0.6%, while the benchmark S&P 500 (^GSPC) climbed by roughly 0.5%.
As investors were more certain that the Federal Reserve will reduce interest rates more than anticipated in 2024, stocks rose. Last week, such optimism were enhanced when decision-makers realised their attempts to reduce inflation were having an effect.
However, betting for more rapid and significant rate decreases have been rebuffed by Fed officials. President of the Chicago Fed Austan Goolsbee stated on Sunday that it is premature to declare victory against inflation, after his New York counterpart John Williams’ statement on Friday that discussing rate reduction is “premature.”
See more about the implications of the Fed’s rate-hike delay on credit cards, loans, bank accounts, and CDs.
To help establish expectations, investors will be keenly observing the Personal Consumption Expenditures price index report on Friday, which is the Fed’s favoured inflation indicator. Price pressures should have subsided in November, according to economists.
Corporate shares of US Steel (X) surged 26% on the announcement that Nippon Steel of Japan will acquire the firm for a reported $14.9 billion. At $55 per share, it is offering the steelmaker a premium of around 40% over its most recent closing price from August.
Oil prices reversed course and increased in the commodities market after BP and other container lines stopped all trips through the Red Sea due to assaults on ships. Analysts have cautioned it might upset flows. While Brent crude futures (BZ=F) were trading close to $78 per barrel, West Texas Intermediate (CL=F) futures were trading little below $73.
A new programme that allows renters to lease their rooms on Airbnb part-time was launched by Airbnb last year (ABNB). It seems to be gathering momentum.
About a year ago, the firm introduced its “Airbnb-friendly apartments” platform, which enables tenants of certain apartment complexes to sublease their flat while they are gone. According to the organisation, over 900 tenants have made around $7 million in total to date.
The worldwide head of real estate for Airbnb, Jesse Stein, stated on Yahoo Finance Live on Monday that “consumers are looking for more flexibility.” “Consumers are trying to find ways to maintain their standard of living.”
By registering their apartments as short-term rentals, most tenants would be breaking their lease, but building complex landlords who participate in the programme have already made a deal with Airbnb.
Among the partners are Starwood Property Trust, Inc. (STWD), UDR, Inc. (UDR), Equity Residential (EQR), Greystar, and other real estate investment trusts that provide hosting options to tenants.
According to Stein, “the institutional real estate community’s response has surpassed our expectations, and renters are now searching for apartments that permit them to host on a part-time basis.”
The Wall Street Journal reports that the two parties are “actively” negotiating a multiyear streaming relationship and strategic investment. In the event that an agreement is reached, Diamond’s games would officially broadcast on Amazon Prime Video.
In March, Sinclair Broadcast Group subsidiary Diamond, a regional sports network (RSN) operator, filed for Chapter 11 bankruptcy protection. Until a decision is reached about Chapter 11 vs liquidation, the firm is presently involved in judicial procedures.
In 2019, Diamond signed a $9.6 billion agreement with Fox to purchase the broadcasting rights for 42 clubs in the MLB, NBA, and NHL. However, in order to do so, the financially troubled RSN took on almost $8 billion in debt, which, when combined with general cable reductions, resulted in its bankruptcy in March.
While shares of Sinclair (SBGI) increased by more than 2%, shares of Amazon increased by about 3%.
Because it “doesn’t comment on rumours and speculation,” Amazon declined to comment. The Sinclair Group remained silent as well.
In the midst of a tumultuous economy, the public mostly backed unions, the president took his first-ever picket line, and a wave of high-profile strikes resulted in substantial victory for workers in negotiations, indicating a comeback of the US labour movement.
Workers have called for strikes over 400 times since the year’s beginning through mid-December, according to Cornell University’s School of Industrial and Labour Relations’ Labour Action Tracker. Thousands of workers participated in the labour activities.
However, how can labor’s current surge in popularity and increased organising activities reconcile with a historically low unionisation rate?
Thanks in part to writers and performers who have demanded more access into the industry, Netflix has now embraced greater openness with the publication of more precise viewing statistics.
Similar to other streaming services, Netflix had not disclosed audience statistics in detail; however, Alexandra Canal of Yahoo Finance writes that the Hollywood guilds were able to include requirements for openness in their most recent contract discussions with the studios.
The video streaming behemoth debuted its inaugural biannual watching report last week under the name “What We Watched: A Netflix Engagement Report.” The study comprises hours viewed for each title watched for more than 50,000 hours, or 99% of all Netflix viewing, and spans six months of data.
During a press conference last week, co-CEO Ted Sarandos stated that the company’s previous concealment of viewing data made it easier for it to compete as a startup. However, he added, as Netflix developed, the lack of openness “created an atmosphere of mistrust with producers and creators and the press over time.”
As more people cut the cord or discontinue their cable subscriptions and the media landscape moves past independent rating systems, Netflix’s action may encourage greater transparency among other streamers.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) showed a four-month fall in builder confidence, but the index reading increased to 37 in December from 34 in December. Confidence, however, stayed below a crucial 50 break-even point. According to a Bloomberg survey of economists, an index value of 37 was predicted for December.
The largest confidence boost came from mortgage rates dropping below 7% for the first time since August, which gave the housing market new vitality. The Federal Reserve also made hints that big rate cuts are coming next year, which increased confidence.
NAHB chair Alicia Huey, a custom homebuilder and developer from Birmingham, Alabama, stated, “Builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look.” Mortgage rates have dropped by around 50 basis points over the past month.
Some prospective purchasers are still holding off despite the decrease in interest rates. In an effort to increase sales, builders keep cutting prices. Similar to the peak of the previous month, 36% of builders reported lowering house prices in December. According to the NAHB, the average price drop stayed at 6% from the previous month.
Because of the low inventory in the resale market this year, builders had been enjoying a high, but the shock of rising mortgage rates in the autumn
The greatest method to address the affordability problem, increase the supply of homes, and reduce inflation is to increase the building of new homes, Huey continued. “The country faces a considerable shortage of housing.”
The sales expectations index for the next six months gained six points to 45, while the index assessing present sales circumstances increased three points to 24. And the gauge, which indicates the state of sales at the moment, remained at 40.