# 676 – 🥴 Home prices = still not peaking – The Average Joe

Newsletter

Latest Issues Subscribe

Company

About Us Jobs
×

Become a better investor with our free daily newsletters

Join 250,000+ investors discovering new market trends and ideas.

    # 676 – 🥴 Home prices = still not peaking

    victorlei

    April 18, 2024

    .bh__table, .bh__table_header, .bh__table_cell { border: 1px solid #C0C0C0; }
    .bh__table_cell { padding: 5px; background-color: #FFFFFF; }
    .bh__table_cell p { color: #2D2D2D; font-family: ‘Helvetica’,Arial,sans-serif !important; overflow-wrap: break-word; }
    .bh__table_header { padding: 5px; background-color:#F1F1F1; }
    .bh__table_header p { color: #2A2A2A; font-family:’Trebuchet MS’,’Lucida Grande’,Tahoma,sans-serif !important; overflow-wrap: break-word; }

    Good morning. In a world where most of us pay with our cards or phones, the humble coin has fallen on hard times. Americans reportedly throw away $68M in coins each year — which is why Reworld, a penny-pinching waste processing company, is sifting through garbage to find loose change. They’ve found a solid chunk of change over the past seven years, netting $10M in coins — though only $6M were in usable condition.

    Of course, Reworld better hope that the US Mint doesn’t discontinue the penny. Many are calling for it, given that each penny costs a highly unprofitable $0.03 to mint.


    COMMODITIES

    Commodities Are Outpacing Stocks to Start the Year: Here’s What To Know

    In this week’s global weather forecast, Dubai receives two years’ worth of rain in just 24 hours, extreme heat waves scorch other parts of the world, and clear skies allow commodity prices to reach new highs. When uranium reached a record high in early January, we had no idea it would be the first of several commodities to breach records… and by the looks of it, we might soon be celebrating (or angsting) about higher prices all year long.

    Commodity boom: This year, the Dow Jones Commodity Index, a measure of 28 different commodities prices, has risen 6.5%, outpacing the S&P 500. Investors and producers are locking in contracts to hedge against increasing costs amid geopolitical risks, environmental disruptions, and supply uncertainties.

    • Two of the world’s most valuable commodities have led the gains, with gold notching record highs — and oil eclipsing $85/barrel due to conflicts in the Middle East.

    • Cocoa and coffee prices have also surged to their highest in nine years due to heat waves and extreme weather.

    Inflation watch

    The rising commodity prices today are reminiscent of the early pandemic days when raw material prices soared — and inflation followed as manufacturers faced higher costs in everything from baking bread to building AI chips. That trickled down to consumers through higher prices, and if this trend doesn’t reverse, buyers could be in for more sticker shocks.

    • This week, Fed Chair Jerome Powell emphasized the “lack of further progress” in lowering inflation to 2%, which could delay interest rate cuts or, worse, lead to more rate hikes.

    • However, analysts underscore growing costs of commodities like copper often signal economic strength.

    Worth buying? Commodities may offer a hedge against inflation and continue rallying, but Bloomberg’s John Stepek warns that “while they can work well during the right conditions, the rest of the time, they’re mediocre at best.” Just take a look at our digit chart (way below), which shows that commodity returns have been negative over the past decade — and was the worst-performing major asset class.


    PARTNERED WITH PARADIGM PRESS

    James Altucher: Buy This Crypto for a Rare Chance at 8,788% Gains

    On April 19, 2024 the entire crypto market could begin skyrocketing. And crypto millionaire James Altucher has pinpointed ONE coin he thinks will gain a whopping 8,788% in the coming years…

    Enough to turn a $10K stake into nearly $1M by 2030. The next crop of crypto millionaires is about to emerge. So if you missed out on the first crypto boom…

    Now may be your last chance to earn your fortune from this market…And it all starts on April 19.

    Click here to see James Altucher’s urgent presentation now.


    LARGECAP RECAP

    🖥️ ASML’s first quarter results show chipmakers remaining reserved on expansion

    Are semiconductor companies caught in an AI bubble? That’s the trillion-dollar question — and this week, we’re getting some insights, starting with ASML’s ($ASMLF) earnings report. On Wednesday, a major supplier of advanced chip machinery to TSMC ($TSM), Intel ($INTC), and Samsung revealed a 21.6% drop in sales compared to last year, with net income falling by 37.4%.

    • While a sales decrease was expected, the 4% decline in net bookings for ASML’s machinery was more aggressive than anticipated.

    • This slowdown reflects uncertainty among semiconductor firms, which are hesitating to expand production amidst a year-long lull in smartphone and laptop sales.

    Reasons to worry? Quilter Cheviot’s Ben Barringer warned that the first quarter’s slowdown might be “an early warning sign” for the semiconductor industry — especially considering ASML’s outsized importance in global chip production. However, ASML maintains that its 2024 sales will look similar to 2023 as it navigates a “transition year,” preparing for a slew of new semiconductor plants in the US — and banking on a potential demand rebound, which Samsung said it’s already seeing.

    🛍️ Amazon’s good year gets better as Prime memberships rise

    The e-commerce giant’s huge pile of cash is getting bigger, as Amazon Prime memberships hit a new high in March, marking an 8% increase from the year before — despite recent changes that may have alienated some customers. This surge means Amazon ($AMZN) will have generated $10.8B in subscription revenue for the first quarter, a 12% uptick.

    • Last year, Amazon upped the free shipping threshold for non-Prime members, possibly nudging some towards subscription.

    • Including live sports on Prime Video has spurred growth, with viewership for Amazon’s Thursday night NFL games soaring 24% last season compared to the season before.

    Global ambitions: Prime doesn’t just bring in subscription revenue — surveys show Prime members tend to spend more than non-Prime members. But if Amazon’s going to increase its Prime subscriber base, it still has work to do overseas. That’s why analysts are watching India — where a major investment in India-centric content on Prime Video has made it Amazon’s fastest-growing market outside of the US.


    JOE’S MARKET PULSE

    🔗 United Airlines / Eli Lilly

    Fed’s spending spree exposed: Your retirement on the brink? The national debt is ballooning out of control – escalating by $1 trillion every 100 days. It's not just numbers; it's a direct hit to your IRA/401k. Retirement savers, it’s time to take a stand. Protect and grow your retirement with the steadfast power of gold. Get Your Free Wealth Protection Kit Now.*

    Markets & Economy

    FTC may block fashion mega-merger: Tapestry ($TPR), already owning Coach and Kate Spade, seeks to buy Capri ($CPRI), owner of Michael Kors and Versace — but the FTC will discuss if such a massive luxury fashion merger would be anti-competitive. [Read]

    Tesla ($TSLA) seeks shareholder approval for Musk’s hefty pay package: Musk has “extensive ties” to the board, which is why Delaware courts have blocked the move so far — but that hasn’t stopped the board from once again pushing for approval of the CEO’s multibillion-dollar payout. [Read]

    Biden calls to triple China tariffs on steel, aluminum: The Biden admin continues to take issue with China’s trade practices, which they fear could lead to an oversupply of clean energy products like EVs and solar panels — so now they want to significantly raise the current 7.5% tariff rate on steel and aluminum imports. [Read]

    Business & Wealth

    Superyacht sales hit choppy waters: Wait times of up to four years on orders and reduced demand due to Russian oligarchs exiting the market led to a 17% drop in superyacht sales last year. The largest yachts (over 650 feet long) saw the steepest decline in sales, down 40%. [Read]

    Here’s how much single people need to live comfortably: If you’re a single person living in Massachusetts, you’ll need a ~$116K/year just to get by — even though the median income for individuals in the US is ~$60K. Six-figure salaries are also needed in NY, CA, WA, and HI. [Read]

    Gaming giant Take-Two Interactive ($TTWO) announces sweeping job cuts: The company behind major franchises like GTA and NBA 2K will cut 579 jobs and scrap a bunch of in-progress titles as the gaming industry continues to face layoffs. [Read]

    *Thanks to our sponsors for keeping the newsletter free.


    CHART


    DIGIT OF THE DAY

    The 2024 Housing Market Heats Up, With Home Prices Climbing An Additional 1.7% This Year

    Spring has sprung, and so have home prices. Fannie Mae’s Home Price Index (FNM-HPI) reveals a 1.7% rise in Q1 — mirroring the previous quarter. With affordability already out of reach for many, the dream of homeownership is becoming increasingly elusive.

    • Since this time last year, single-family home prices have surged by 7.4% — surpassing rental affordability.

    • Mortgage rates soaring to around 7% has also contributed to housing unaffordability — the average American household holds a fixed rate of around 4%.

    Homeownership blues: In a recent poll, ~40% of renters worry they'll never afford a home — while roughly 14% have no desire to own one. Continuous price hikes, driven by limited housing supply and high demand, suggest little relief soon. Fannie Mae’s Doug Duncan predicts ongoing affordability struggles for homebuyers due to “high home prices and elevated interest rates.”


    EXTRA JOE

    How was today's newsletter? Share your feedback…

    ❤️‍🔥 Issue was great. Now keep going.

    😐 Satisfied but do better.

    🥱 Is that all you got?

    Was this email forwarded to you? Subscribe here.

    Missed an issue? Catch up.

    Looking to advertise to 250K+ investors? Fill out this form

    Ad Disclosure: This ad is sent on behalf of Paradigm Press, LLC, at 1001 Cathedral St., Baltimore, MD 21201. If you're not interested in this opportunity from Paradigm Press, LLC, please click here to remove your email from these offers.

    All content provided by The Average Joe is for informational and educational purposes only and should not be taken as trading or investment recommendations.

    Trending Posts