August 30, 2023

📰 News Organizations

• Nvidia Unveils Google AI Partnership. Through the partnership, Google’s cloud customers will have greater access to technology powered by Nvidia’s H100 GPUs. This could expand distribution of Nvidia's artificial intelligence technology.
  

• Google Chases Microsoft, Amazon Cloud Market Share With AI Tools. Google Cloud CEO Thomas Kurian to announce AI enhancements for corporate Gmail customers for $30 a month. The tools can help draft emails or summarize lengthy documents stored in the cloud.
  

• Regulators Plan To Force Regional Banks To Raise Debt In Case Of Failure. All American banks with at least $100 billion in assets would be subject to the new requirement, which makes them hold a layer of long-term debt to absorb losses in a government seizure.
  

• US Court Paves Way for Spot Bitcoin ETF in Grayscale Ruling. Bitcoin-related assets surged on the news, which traders were betting would pave the way for broad investor adoption of ETFs backed by bitcoin rather than futures.
  

• BYD Posts 200% Surge in First Half Profit. Net profit in the first six months rose 204.68% to 10.95 billion yuan ($1.50 billion), as compared to 3.6 billion yuan a year earlier, driven by record deliveries. BYD is targeting the mass market that Tesla cannot reach.

• Worldwide Lithium Shortage by 2025. BMI, a Fitch Solutions research unit, was among those that predicted a lithium supply deficit by 2025. In a recently published report, BMI largely attributed the deficit to China’s lithium demand exceeding that of its supply.

🐦 Twitter

• The tightening financial conditions illustrated in one chart: US housing payment for new homes is now as high as 51% of the median household income. That is the highest level since the 1980s. Source.
  

• The Fed may be navigating under cloudy skies, but market pricing suggests that some investors are anticipating a world with a higher r* and a higher inflation target. If that is the case, then nominal rates will remain structurally higher. Source.
  

• Due to higher mortgage rates, 13% of home buyers nationally switched from wanting to buy to choosing to rent. Given where rates are, it's surprising that the figure isn't higher. Only 9% switched in the Southeast but 20% or higher did in the Southwest, Texas, and Northwest. Source.
  

• Bad news for RE agents and prospective homeowners. About 7% of the decline in home listings is because home buyers who already own a home are choosing to rent out their current home rather than sell it, based on this chart. Source.
  

• Another week of outflows for U.S. large-cap equity ETFs, which lowered % share of rolling 1-month inflows from 21% to just 4%. Government bonds had largest share of inflows last week and are back in top spot on rolling 1-month basis. Source.
  

• Existing home sales just fell nearly 17% over the last year. This is the lowest existing homes sales have been since 2010. Meanwhile, Goldman Sachs just said they don’t see existing home sales returning anytime soon. Goldman forecasts it’ll take until 2027 to return to pre-pandemic levels. Source.

📓 Online Publications

• Job Openings Decreased to 8.8 million in July. Job openings edged down to 8.8 million on the last business day of July, the U.S. Bureau of Labor Statistics reported. Over the month, the number of hires and total separations changed little at 5.8 million and 5.5 million, respectively.

• AT&T Launches 5G Home Internet Service. The 5G home internet service will compete with those of T-Mobile and Verizon. While demand for AT&T's legacy wireline services is in decline, the fiber business is already big enough to drive growth for the consumer wireline segment.
  

• Nearly 15% Of Your Taxes Goes To Pay Interest On National Debt. The growing national debt is a major concern for many economists. They worry that it could lead to higher interest rates, slower economic growth, and even a financial crisis.
  

• Work Commutes Drive 2023’s Housing. More home buyers are once again factoring commute times into their homebuying decisions and are moving closer to city centers. Companies are demanding that workers return to the office, driving growth back to the city.
  

• U.S. Home Prices Rose in June—Paced by Chicago. Several big office hubs posted the strongest home-price gains in the month of June, according to the latest report. Chicago, Cleveland, and New York led the rankings. The persistent lack of home listings has pushed up home prices, as buyers converge on a limited number of homes on the market.

🎧 Podcasts

• Goldman Sachs Is Selling Off One Of Its Financial Planning Units. The team is made up of about 200 employees and offers financial planning to customers who are well-off but not exactly super wealthy. This is now the second Solomon-era deal that Goldman is undoing. Source(0:58)

• El Niño’s Storm Clouds Gather Over Global Food Prices. The weather pattern is expected to raise global food prices even higher than they already are. That could lead to higher household inflation and that could cause some central banks to keep interest rates higher for longer. Source(4:12)
  

• Potential Ripple Effects of China Exporting Deflation. Geo Chen says that cheaper Yuan and cheaper exports lead to exporting deflation to the rest of the world and that's definitely helping the disinflation trend. It also helps Jerome Powell do his job to a certain extent. Source(23:05)
  

• Google Flight Tracking. Rolling out this week, the company is debuting new insights that will leverage historical trend data that lets consumers see when prices have typically been lowest to their chosen destination on their selected dates. Source(19:00)
  

• Silicon Valley Elites Buying Up Land in California. Flannery Associates has acquired 52,000 acres of farmland worth $800 million, becoming primary landholders in Solano County California, with backing from notable figures including Reid Hoffman, Stripe brothers, Marc Andreessen, and Laurene Powell Jobs, who intend to create a new utopian city. Source(34:49)