Walmart and Home Depot results show the consumer is still spending, although shifting their habits, which results in excess inventory, markdowns ....and potential DEflation? US Walmart sales were up over 6%. Walmart inventories are up over 26% YOY which may imply an end to the supply chain crisis of 2020-2022? When prices rise too far, too fast, consumers simply stop buying.
Wells Fargo is planning on pulling back its mortgage business, and will likely begin by reducing the bank’s ties to outside mortgage firms, which generated about a third of the company’s $205 billion in new home loans last year. (Bloomberg)
"Forward looking sensitive prices are not going up. Wages in certain sectors will go up. Look at the housing industry which was a major contributor to rising costs: it has had the biggest drop in 6 months in its history besides March-April 2020. Real Estate Agents tell me prices are softening almost everywhere. Housing is roughly 40% of CPI. Will you see that in the official statistics? No! The government has a big lag on that....but on the ground house pricing is not rising like the headlines suggest. On the ground, sensitive commodity prices are not rising. I think June was the bottom and the second half could be good! We might still get that soft landing. Some interest rates raising is still necessary, but too much. Getting the balance right is key." Jeremy Siegel, Upenn Wharton School Professor
This Thanksgiving Meredith Peterson of COMPASS Orinda will travel to Guatemala to build a house for a family through HOME FOR A HOME an organization near and dear to COMPASS as it was started by our very own realtor colleague Nick Cooper. Meredith has been giving to this organization for the last 7 yrs and will be building her 7th house during thanksgiving with her two daughters, 13 and 16 years of age....starting in real estate YOUNG! And COMPASS CARES built a house as well! Here is their fundraising page.
Inflation in the UK soared to 10.1% annually, above a consensus forecast of 9.8% and up from 9.4% in June. Rising food prices made the largest upward contribution to annual inflation rates between June and July. The Bank of England expects inflation to peak at 13.3% in October. A massive drought in Europe won't be helpful. Massive energy cost surges have been fueled by Russia's gas supply cuts and BREXIT that has caused costs for importers to increase, combined with a weaker pound....as well as reducing the availability of foreign workers in some lower-paid services industries, such as hospitality. UK house prices rose 7.8% in the year to June, a slowdown from the 12.8% annual rate recorded in May. (CNBC)
New home construction in the US dropped 9.6%.....this does not bode well for when the economy recovers as it further fuels the UNDER-supply of housing that is already grossly under-supplied.....which could fuel even bigger price escalations down the road..... (CNN)
COMPASS Agents…Click here today at 4pm ET / 1pm PT to watch our Q2 Earnings Fireside Chat with Kristen Ankerbrandt, Chief Financial Officer, and Rich Simonelli, Head of Investor Relations. Kristen and Rich will give you insights into our quarterly results – I hope to see you there!