Home Prices Fall The Most In 11 Years

JOIN OUR LIVE SESSIONS! Our LIVE session starts when the big institutions and elite traders do before the opening bell. We'll look at real-time dark pool data as the market movers position themselves for the trading day in secret off-market exchanges. [JOIN OUR LIVE TRADING SESSION @ 6am PT / 9am ET]( [Shadow] Hello investor, Stocks jumped yesterday after both political parties were optimistic that a debt ceiling deal will be struck before the country defaults on its debt obligations, with tech-heavy Nasdaq jumping by almost 2% to the highest since April 2022. But there was a small change in expectations on Wall Street. The odds of a June central bank hike surged to about 40% after Fed Bank of Dallas President Lorie Logan said yesterday that she isn’t fully sold on a pause in rate hikes. If things were to remain as they are now, she would support another rate hike. However, central bank Governor Philip Jefferson supported a pause to allow rate hikes to work their way into the economy. - The Fed is “in a really tough spot,” said Katerina Simonetti at Morgan Stanley Private Wealth Management. “The big decision for them is the timing because once they announce that they’re done raising rates, markets are just going to assume that they’ve succeeded. And it might not necessarily be the case. Inflation so far is proving to be sticky.” This was a surprise. The Fed had been fighting back markets’ expectations of rate cuts happening this year. Many officials said they are unlikely to happen this year. But now, there is a possibility of another rate hike. - “As financial markets have been obsessing about the state of debt ceiling negotiations, the airwaves have also hosted an onslaught of Fed speakers, who have seemingly been tasked with sending a message to the markets,” said Quincy Krosby, chief global strategist at LPL Financial. - “The message, that the Fed, at this point, has no plans to cut rates this year, but now also introducing the possibility that another rate hike could be forthcoming at the June 13-14 meeting.” Prices are falling for homes: Sales of previously owned homes fell in April from a year earlier by the most in more than 11 years. The exact number was a decline of 1.7% for the national median existing-home price, according to the National Association of Realtors. Notably, home prices fell the most in the western part of the country, while prices increased from a year earlier in many eastern markets. (Source: WSJ) Rising mortgage rates evaporated the demand for home purchasing, since high rates mean higher mortgage payments. The average rate for a 30-year fixed mortgage was 6.35% in the week ended May 11. - “The home sales still struggle to recover,” said Lawrence Yun, NAR’s chief economist. “Right now home sales are just bouncing a little higher or a little lower, depending on the movements of the mortgage rates.” Typically, spring is the hottest season for real estate. Families with children often prefer to move when schools are over. But many current homeowners are reluctant to sell homes because they’ve locked into lower mortgage rates, and they don’t want to double their rates by taking on a new mortgage. Some experts believe there could be a tipping point. Homeowners don’t want to sell right now, but what if prices keep dropping? Eventually, they may feel tempted to sell to maximize their value because higher interest rates likely drag down housing prices. We will see whether it will happen. Top Undervalued Hotel Stock To Buy Right Now Today’s Stock Pick: Playa Hotels & Resorts NV ([PLYA]( When a CEO is literally yelling during the earnings call about how undervalued his company is, it is worthy a look, right? That’s what we have here with Playa Hotels & Resorts. An analyst asked the CEO if it is possible that Playa is trading far below its value because their hotel properties aren’t valued properly. Basically, all-inclusive resorts aren’t as liquid as your typical house. So their valuations don’t get updated as quickly. So, the analyst asked the CEO if he would consider selling off a small piece of its property just to establish a new valuation in its properties. The thesis is simple. You’d be saying to the market – “Hey, look at this asset. We sold it at x price, and that is above what you currently value our portfolio. Isn’t it time to re-rate these assets?” Nice, right? The CEO called it a solid idea academically but not as good as in real world. He viewed inefficient markets as an opportunity for Playa to add properties at a discount to their portfolios. And this is key. Playa has found a secret sauce to unlock even more valuation per property. (More on this later.) Sure enough, Playa bought about $41 million of its shares in the first quarter alone. And an additional $20 million so far in the 2nd quarter when the company hosted the earnings call. That was about 4% of its current market cap! - “We continue to believe that our stock provides a tremendous value relative to the fundamentals and share repurchases are a phenomenal use of capital for our free cash flow,” said CEO Bruce Wardinski. Indeed, Playa is a phenomenal value for your portfolio. Playa Hotels & Resorts is the owner, operator, manager and developer of all-inclusive resorts in prime beachfront locations – Pacific Coast, Cancun, Jamaica, and Dominican Republic. (Source: Playa Hotels & Resorts) Here’s the secret sauce behind Playa’s business. It partners with elite brands like Hyatt, Marriott, and Hilton to offer all-inclusive resorts. Its competitors don’t work with as prestigious brands as Playa does, giving them limited U.S. consumer recognition. (Source: Playa Hotels & Resorts) Offering all-inclusive makes a lot of sense for a business. Guests book and pay further in advance, offering more predictable revenue streams. Because its services are in one package, the hotel can prepare its resources better (in labor, etc.). If you offer fee-based hotels, you will have difficult time to anticipate demand. (Source: Playa Hotels & Resorts) Best of all, all-inclusive often offers best deals for consumers. They pay less in total if they consider all extra expenses they’ll have to pay if they stayed at a regular hotel. (Such as food, entertainment, etc.) For example, Playa estimates a 36% savings if consumers paid for an all-inclusive hotel. (Source: Playa Hotels & Resorts) Therefore, Playa can make a lot of money by buying a non-branded property and convert them into a branded one. Often, it brings an instant boost to demand and rates. Its Hyatt Ziva Cancun property brought a 35% Cash-on-Cash return since its opening date of 4th quarter in 2015. (Source: Playa Hotels & Resorts) And it wasn’t an unicorn project. Playa averaged about 34% cash on cash return from its conversion and expansion projects! (Source: Playa Hotels & Resorts) As a result, Playa is a money-making machine. It has the highest 4-year historical average for LTM adjusted EBITDA margins. It is a company that knows how to make money off its properties. (Source: Playa Hotels & Resorts) Bottom line: Playa Hotels & Resorts has a secret sauce to find undervalued properties and turn them into a cash cow. That’s the best kind of a business. And they hold an enormous competitive advantage in working with elite brands. You can simply buy this stock for its undervalued properties, and be confident that your money will be protected with a great upside. FREE LIVE TRADING SESSIONS & TRAINING USING THE MOST COMPREHENSIVE DARK POOL MONITOR AVAILABLE TO THE RETAIL INVESTOR Join our LIVE Trading Sessions throughout the day where we will focus on how you can learn to master the markets through the use of advanced algorithms and AI to trade like the institutions. BEFORE THE BELL Starts 6am PT / 9am ET Our newest LIVE session starts when the big institutions and elite traders do, well before the market opens. We'll look at realtime dark pool data as the market movers position themselves for the tra ding day in the secret off market exchanges. LIVE TRADING SESSION Starts 8am PT / 11am ET Take advantage of Trade Algo's proprietary advanced algorithms for anticipating big market swings in our daily LIVE trading session. Trade Algo's Senior Analyst Luke Russell will walk you through the key tools and strategies that the institutional investors and top traders use to profit from high volatility in the market. THE FINAL HOUR Starts Noon PT / 3pm ET According to Wall Street Journal approximately 20% of the trading volume happens at the last 30 minutes of the day. Institutions make the majority of these trades in private dark pool exchanges -- away from the public’s eyes. The timing happens for two reasons: 1) Index funds make their trades to mimic the closing price of a stock. 2) Billionaires trade near the end of the day because they anticipate major news that will be released during after-hours. Because they trade in dark pools, the public doesn’t know about these trades until one day later. We’ve consistently spotted the correlation between a spike in dark pool volume at the end of the day and the next day’s price movement. 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