ð¡The housing market gods give us some hope. January 19, 2024 | Peel #629 In this issue: - ð¡The housing market gods give us some hope. - ð¤Semis are still cool, and meanwhile, diluting investors are not. - ð³Vibe checking the U.S. economy goes⦠well, exactly how weâd expect. Market Snapshot ð¸ = Banana Bits ð - In their classically-last-minute fashion, Congress has averted a [government shutdown](=)⦠for another few weeks. - The [EU does](=)[not](=)[want]() Amazon in control of those little robots that map out our houses. - Weak freight demand kills the vibe as the [first major U.S. transport]( stock to report earnings for Q4 disappoints investors. Our all-star mentor army is ready to help you this recruiting season... ðª This recruiting season, join forces with [WSO Academy's]() formidable mentor army. Our 50 experts, hailing from the top echelons of high finance, are dedicated to guiding you through every step of your job hunt. Our reserves (1,300+ mentors in the deep roster) are also ready to be deployed when you need it mostâ¦right before a critical interview or superday. Benefit from personalized resume critiques, mock interviews, and insider tips on navigating the finance world. With our mentors' wealth of experience and targeted advice, you're not just prepared â you're a step ahead. Enlist with us and turn this recruiting season into your launchpad for a stellar career. [Click here to join the waitlist before it closes]() Macro Monkey Says ð Hope In Housing? Maybe we will be able to move out of our parentâs basements someday after all. Not to imply that the housing market was firing on all cylinders back in 2019, but in the post-pandemic days of 2022 and â23, owning a home has become like owning gold: rare, and mostly for old people. But as highlighted yesterday, the NAHB/Wells Fargo Housing Market index saw its largest month-over-month jump in nearly 2 years in January. Take a look: 3 factors are considered in this survey, being: - Present Single-family Sales, making up 59.2% of the index
- Single-family sales in the next 6 months, at 13.6% of the index, and
- Traffic to purchase single-family homes, at 27.2% of the index Jumping from 37 in December to 44 now signals that right as we rolled into 2024, prospects for a better housing market have spiked too, at least according to the homebuilders surveyed. But thatâs not allâon Thursday, our economic overlords blessed us with additional housing market data, partially confirming the hope in the above chart for Americans to finally have some, well, hope in the housing market. Some of the data released includes: - Building Permitsâwhich grew 1.9% in December after falling 2.1% in the month prior
- Housing Startsâwhich fell 4.3% in December after vaulting 10.8% in November Within that 4.3% decline, single-family housing starts actually fell a disgusting 8.6% in December. Butâthatâs still 15.8% higher than the number of single-family homes started in December of 2022. Apparently, the big, tough Carhart-wearing homebuilders out there didnât want to get down and dirty in the overly cold and rainy December we just had. Meanwhile, building permits provide a good proxy for future housing starts, which both give us a signal of housing supply, which has easily been the biggest hater on the U.S. housing market in the post-pandemic era so far. Get hyped, Gen Zers... Because growth in housing supply very well could be the single greatest determinant of our generationâs economic success in the years to come. Surprisingly, however, Gen Zers have been doing pretty damn well getting themselves into homes despite the housing hell of the past 2-ish-years. According to this Redfin chart below, big boy and girl Gen Zers entering their home-buying era have actually outpaced their older, dustier predecessors in overall homeownership rates: [Source]( Rates of ownership among Gen Zers âstagnatedâ in 2023, but according to the same data, Gen Xers and millennials continued to see a steady uptick. The Takeaway? Sentiment and housing supply both appear to be moving in the right direction, for now. In the short-term, that certainly all could change on a dime if Fed Chair JPow decides to continue murdering our hopes and dreams with these damn rate hikes. But longer-term, steady growth in the supply of housing should bring overall price levels more in line with historical affordability rates. By now, we know that rate hikes sure arenât doing it as we normally would expect. Gotta go now. Momâs calling me up for dinner⦠I just hope itâs dino nuggets again. What's Ripe 𤩠Taiwan Semiconductor (TSM) - ð9.8% - This country may have just elected a new leader, but I think we all know what the real President of Taiwan is: semiconductors.
- The worldâs largest chip foundry reported earnings on Tuesday, delivering results that brought the hype back to Wall St that we havenât seen in weeks.
- EPS of $1.44/sh was down from the $1.81/sh last year but still beat expectations. The best part? Low-end sales guidance calls for +20% growth. JetBlue (JBLU) - ð7.8% - âPhew, that was close,â said every single JetBlue investor in the world after a judge blocked their proposed merger with Spirit.
- The break up of the merger was just thatâSpirit is broke, JetBlue is up. $JBLU holders no longer fear absorbing the toxic asset that is Spiritâs balance sheet.
- But JetBlue isnât out of the woods yet as lost partnershipsâlike that with Americanâand other changes made for the merger look to get repaired. What's Rotten 𤮠Plug Power (PLUG) - ð-11.5% - $1bn in new Plug Power shares are coming to market, andâguess whatânobody wants them.
- With B. Riley Financial serving as the real plug selling the firmâs shares for them, Plug Power is increasing their shares outstanding by ~60% from close on Weds.
- Shares will be sold âat the market,â but regardless of their sale price, diluting existing investors by 60% prob feels the same as spitting in their babyâs face. Discover Financial Services (DFS) - ð-10.8% - Lending thousands of dollars to income-less, and often brainless, college students might not be the best business model, it turns out.
- Especially in a high-rate environment. Discover Financial sh*t the bed on earnings last quarter, having been forced to save $1bn more than last year.
- Thatâs thanks to a $717mn increase in loans the firm expects will go unpaid. The rate of bad debts is expected to more than double from last year, too, rising from 2.13% to ~5%. Thought Banana ð¤ Blinded By the Sight Americans are lucky this year as 2024 presents whatâs sure to be another rowdy Presidential contest between one elderly corporate puppet in blue and another elderly corporate puppet wearing red. Iâm sure George Washington would be so proud. But apparently, according to the [Axios Vibe Check]() survey (yes, that is the actual name), our political affiliations play a huge role in determining our economic outlook. Axios got [The Harris Poll]( to do the hard part and actually run the survey, but the results were unsurprisingly surprising: - âRepublicans, rural residents, renters, women, and singles,â according to their polling, âdisproportionately feelâ like the economy is f*cked
- 60% of those surveyed feel âtriggeredâ by trips to the grocery store, with Republicans the most likely to feel âangryâ and renters feeling âanxiousâ
- 72% of Americans who claim to âfeelâ inflation day to day cite the grocery store as their #1 stressor, with gas prices coming in at the #2 spot with 56% So, despite what the economic data actually suggests, large swaths of the country âfeelâ like the economy is far worse off than it actually is. And in part, this makes sense. We spend much of our lives in Elon and Zuckerbergâs universes of X (formerly Twitter) and Instagram. As we all know by now, those platforms essentially just force-feed us content they know weâll get fired up about. Living in these echo chambers could, however, have real economic consequences. Economics is one of those funny areas of study where how we âfeelâ actually can change future outcomes. For instance... When consumers expect a recession, they tend to save more, which leads to lower spending, which can actually lead to an otherwise avoidable recession. The same goes for inflation because if we know costs next month will be higher, weâll spend more now, increasing the velocity of money and potentially triggering further inflation. Objective data truly is no match for human emotion, whether those emotions stem from politics, personal situations, or some other poor life decision. And we all know no one is better at making poor life choices than degenerates like me and you. Canât wait to see how this one turns out! ð The Big Question ð: Will the emotions of Americans drive us into a recession? What about any other poor economic outcome? How can we better educate the public on the current state of the economy? Banana Brain Teaser ð¡ Yesterday ð A total of 5 liters of gasoline is to be poured into two empty containers with capacities of 2 liters and 6 liters, respectively, such that both containers will be filled to the same percent of their respective capacities. What amount of gasoline, in liters, must be poured into the 6-liter container? Answer: 3.75 liters Today ð Each machine at a toy factory assembles a certain kind of toy at a constant rate of one toy every 3 minutes. If 40 percent of the machines at the factory are to be replaced by new machines that assemble this kind of toy at a constant rate of one toy every 2 minutes, what will be the percent increase in the number of toys assembled in one hour by all the machines at the factory, working at their constant rates? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says ð¤ âEconomics is too important to be left to the economists.â â Steve Keen Today's Peel? ð [All the bananas]( ð [Meh]( ð© [Rotten AF]( Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE](=) // [WSO ALPHA](=) // [ACADEMY]( // [COURSES](=) // [LEGAL](=) [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis")
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