Eq: Total Market

(New York)

While there has been some speculation that the US housing market may be facing a tough period ahead, new data is showing that prices might continue rising. The big worries are that rates will rise quickly, hurting mortgage demand, while at the same time, the new tax package will reduce home-buying because of the lack of deductibility of mortgage interest above a threshold. However, new data shows that housing inventory continues to sink. There are few homes for sale compared to buyer demand, and the building rate of new homes is weak. This means there is much more demand in the market than there is supply.


FINSUM: We are not very worried about home prices, especially in the lower and middle pars of the spectrum. The largest ever US generation—Millennials—is entering the key home buying period of their lives.

(New York)

Any stock investor, especially those who have been investing over the last twenty years, has noticed that there is a dearth publicly traded companies these days. Years of mergers and acquisitions, combined with a lack of IPOs, means there are many less publicly traded companies these days. Now, in what seems a strong move to change that, the SEC is considering making a new rule that would bar shareholders from suing companies, with all claims moving to arbitration instead. Doing so would eliminate one of the headaches of going public for companies, and would move the relationship between shareholders and companies to something more akin to clients and advisors, where arbitration is the norm.



FINSUM: This is an interesting move, but we do not think it is enough to push companies over the edge to IPO. It might also prove poor from a corporate governance perspective.

(Washington)

There has been a lot of talk lately about a coming US and global trade war. A lot of the focus has been on China, but also NAFTA. Well Bloomberg says the idea of a looming trade war is wrong, because it is already here. Over the last few months the US has already added some stiff barriers to trading with Canada. The moves show that the US is not afraid to throw up tariffs even in trading relationships that are pretty balanced.


FINSUM: Trump and the US government are now taking a very firm line on trade by increasing tariffs and launching investigations into potential violations. We like the idea of the making US trade more fair after years of undermining ourselves, but do have some concerns it could backfire in the long run.

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