Displaying items by tag: US

(Atlanta)

There are a lot of investors worried about the US housing market at the moment. As rates rise, and a potential recession looms, some think housing could falter. On the flipside, however, it is often considered that home supply is low and demand is high, which has been pushing up prices and shows no signs of abating. Now, there is another factor to consider—US building materials prices are surging. Everything from lumber (up 16%) to insulation is jumping in price. Homebuilders say that despite the rise in costs, they have been able to offset the increases by hiking their prices, which they say consumers have been willing to pay.

FINSUM: The appetite for homes and new construction seems very strong at the moment, and certainly good enough to carry the market for a while yet.

(Washington)

One of the world’s most respected economists has explained something all investors need to hear—why a trade war with China is impossible to avoid. Stiglitz says that so long as the US does not accept China’s right to develop its economy, there will be no meaningful agreement. Because of the path China is on, and the US’ position—led by Trump—no durable trade deal can be achieved. Fundamentally, the US does not accept that China is a “developing country”, rather it sees it as a large and mature nation, and this conflict will keep any serious deal from getting done.

FINSUM: There may be a short-term deal to save public face, but the US and China seemed destined to square off on trade for the foreseeable future.

(Washington)

In what must be seen as nothing other than a major diplomatic breakthrough, reports are out that the head of the US’ CIA, Mike Pompeo, had a face to face meeting with North Korean leader Kim Jong Un. The meeting comes in advance of President Trump’s planned meeting with Un. The meeting apparently took place over Easter weekend and was a way to lay the groundwork for the president’s meeting. Reports of the meeting were first covered by the Washington Post, and the White House confirmed it had been having meetings at “very high levels”.

FINSUM: We are not sure why Un is talking to the US after decades of diplomatic silence, but we certainly see the dialogue as good news.

(New York)

There have been growing fears over the real estate market for the last couple of years, and now one corner of the market is in the middle of a growing apocalypse. Retail real estate is currently on trend to have by far the worst year in memory. Already in 2018, 77 million square feet of retail store space has been closed. In 2017, which was seen as the pinnacle of the collapse, 105m closed the entire year. The sector has been hit by the rise in ecommerce and changing shopping habits. Now landlords don’t even know what to do with all their space. They will likely “Try to re-let it as a gun range or a church—or it’s going to go back to being a cornfield”, says a head of real estate at a private equity firm. The US has 24 square feet of retail space per person, by far the highest in the world.

FINSUM: Not only do you have ecommerce as a threat, but consumer spending is starting to tighten as we near the end of this cycle. This is going to be a major bust.

(New York)

If you have been reading the news, you will have seen that many are starting to worry that a recession is on the way. While the economy still seems to be in good shape, at the fringes are some data that could foretell a period of contraction. The question is how sharp a contraction might come at the end of this long bull market and economic cycle. Well, Wall Street economists think that the contraction will be slow rather than a steep drop off. Most economists see solid global growth this year of between 3-4%, but thereafter is when things could get dicey.

FINSUM: The big troubling sign to us is that both the US and Europe, which were on different cycles, both seem to be slowing this year, which could portend a recession sooner rather than later.