Member Briefing June 20, 2024
Home Sales Suffer Third Worst Month In The Last 10 Years
May marked one of the worst months for home sales in the past decade, with sales plummeting to their third-lowest level. Continuing a trend seen over the last eight months, the drop in home sales comes as the market deals with high home prices, elevated mortgage rates, and a persistent housing shortage that has deterred prospective buyers. Despite a record high in the median U.S. home sale price during May, the market saw a 1.7% month-over-month decrease and a 2.9% decline from the previous year, according to a report issued by Redfin on Friday, as conditions continue to challenge buyers and sellers across the country.
"Buyers today are facing many of the realities of a hot market even though few homes are changing hands," said Redfin Senior Economist Elijah de la Campa in the report. Sales are sluggish because high homebuying costs are making both house hunters and prospective sellers skittish. With so few homes for sale, buyers in some markets are getting into bidding wars, which is helping push home prices to record highs."
Half of Americans Struggling to Stay Where They are Financially: Poll
Almost half of Americans say they are having a hard time staying where they are financially, according to a new poll. The poll, conducted by Monmouth University’s Polling Institute and released Wednesday, found 46 percent of Americans surveyed said they are struggling to remain where they are financially. Forty-five percent of Americans in the same poll said they are “basically stable” in their financial situation, while only 9 percent said their financial situation is improving.
Monmouth said the results reflect the difficulties many Americans are experiencing with the rapid inflation after the pandemic. Though inflation has cooled, the jump from before the pandemic has been significant. Twenty-four percent told Monmouth inflation and “rising prices” are the “biggest concern facing” their “family right now.” The Monmouth University poll was conducted June 6-10 among a sample of 1,106 people and had a margin of error of 3.8 percentage points.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Israel and Hezbollah Inch Toward Wider War - WSJ
- UN Human Rights Office: Israeli Airstrikes in Gaza May Have Violated ‘Laws of War’ - VOA
- Israeli Peace Activist Held Hostage by Hamas Doesn’t ‘Believe in Peace’ Anymore - BBC
- Israel’s Daily Combat Pause in Part of Gaza: How Is It Working? - NYT
- White House, Netanyahu Clash Over Claims of Withheld Weapons – The Hill
- Ship Attacked by Yemen’s Houthi Rebels in Fatal Assault Sinks in Red Sea - Politico
- Israel warns ‘all-out war’ possible with Hezbollah – The Hill
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- More Russian Warships Spotted Fleeing Crimea - Newsweek
- Drones in Ukraine Get Smarter to Dodge Russia’s Jamming Signals - WSJ
- US Soldier Sentenced To Nearly 4 Years In Russian Prison On Theft Charges - Forbes
- What NATO's Likely Next Chief Means For Ukraine War - Newsweek
- Russia Accuses France of Fomenting War in the Caucasus With Arms Sale – Politico
- Russia Threatens to Seize Assets From U.S. and Allies - SCMP
- Putin Sees Long Partnership With North Korea as He Gets Lavish Welcome - WSJ
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Other Headlines
- Russia Says It Is Awaiting U.S. Response on Prisoner Swap - WSJ
- Nancy Pelosi And US Lawmakers Visit Dalai Lama In India, Angering China - Forbes
- Putin and Kim Sign Mutual Defence Pact - Reuters
- Map Shows Reach of China's Nuclear-Capable Missiles - Newsweek
- Putin Congratulates South Africa's Ramaphosa on Re-election, an Indication of Warm Ties – Reuters
- Japan Defense Spending Plan Takes 30% Hit from Weak Yen – Nikkei Asia
- Europe Gives China a Taste of its own Trade Medicine – Politico
- Investigators: Disregard for Human Rights, Law Drives Crisis in Sudan - VOA
- Hundreds Die of Extreme Heat on Haj Pilgrimage, Reports Say – Reuters
Policy and Politics
Both Sides in DC are Already Drawing Red Lines Over a 2025 Tax Fight
A mammoth tax debate that will dominate Washington in 2025 is already well underway in 2024. The latest example came Monday with a speech from Sen. Elizabeth Warren, the leading Massachusetts Democrat, where she called on Democrats to "stiffen our spines" for the fight ahead. She also laid out a series of what she termed red lines during her remarks, including her desire for new taxes for corporations and billionaires.
Republicans, meanwhile, are set to do everything they can in the months ahead to make sure those red lines never come into play. And they are laying out ideas of their own. Donald Trump floated a range of tax ideas as he criss-crossed Washington DC during a recent visit as he continued his overall push for a straight extension of those 2017 cuts. The true parameters of the debate will be decided by the results of this fall's election when it becomes clear who will control the White House and the two chambers of Congress.
Senate Commerce Committee Struggles to Keep Bipartisan FAA reauthorization Momentum
Bipartisanship is falling apart at the Senate Commerce Committee after Sen. Ted Cruz (R-Texas) won plaudits last month for shepherding the Federal Aviation Administration (FAA) reauthorization through committee and into law. Senate Majority Leader Chuck Schumer (D-N.Y.) ripped Cruz on Monday night for fighting “petty partisan culture wars” over the Spectrum and National Security Act, which was supposed to receive a markup in committee that day.
Commerce Committee Chair Maria Cantwell (D-Wash.) says she was forced to postpone the committee markup of legislation to extend subsidies for high-speed internet because Cruz had insisted on modifications that would have “gutted” bipartisan amendments that had been negotiated with Sen. Roger Wicker (R-Miss.). The GOP source said Cruz was forced to propose modifications to existing amendments because Cantwell didn’t want to allow Republicans to offer new amendments to the bill, despite rewriting it several times.
Amid a Loud Chorus of Criticism, Hochul’s Congestion Pricing Reversal Supporters Speak Up
Since New York Gov. Kathy Hochul abruptly halted the state’s long-planned congestion pricing scheme, there has been a torrent of criticism. But in the weeks after Hochul’s congestion pricing halt, there has also been a more muted but steady stream of support in the form of op-eds and testy press conferences. The governor’s surprise decision left many scratching their heads, but having legislators publicly support it gives the move greater political legitimacy. Right after the governor announced her decision on June 5, her office sent out a “What They Are Saying” press release quoting more than a dozen moderate Democratic lawmakers who supported her move. The next day, her office sent out another similar release adding more state lawmakers and New York City Council members.
On June 6, a few lawmakers held a press conference in the state Capitol to defend Hochul’s decision. The next week, Assembly Member David Weprin held a rally at the foot of the Queensborough Bridge. Weprin said he did not receive any encouragement to hold his press conference from Hochul but that the governor did reach out to thank him for his public support afterwards. This week, The Journal News published two op-eds backing the governor’s reversal. The first was written by Kendra Hems, president of The Trucking Association of New York. The second was by Democratic Rep. Pat Ryan, who’s facing a formidable challenge from Trump-endorsed Alison Esposito in his Hudson Valley swing district. Polls from FiveThirtyEight have the candidates tied at 43% of the vote, and Ryan may be hoping that his stance against congestion pricing could give him the edge against Esposito.
Health and Wellness
What Is The Latest COVID Variant KP.3?
There have been a lot of changes with COVID-19 over the last few months, but a new variant is poised to be the dominant strain of the summer: KP.3. KP.3 is part of a trio known as the FLiRT variants and just surpassed fellow FLiRT variant KP.2 as the most common COVID-19 strain in America, according to data from the Centers for Disease Control and Prevention (CDC). As of now, KP.3 is responsible for 25% of COVID-19 cases in the country. Prevention offers the following information:
What is the KP.3 COVID-19 variant?
What are the symptoms of KP.3?
How can you prevent a KP.3 infection?
Will the fall COVID-19 vaccine protect against KP.3?
Election 2024
- Trump Says Execs Who Don’t Support Him Should Be ‘Fired For Incompetence’—While Touting Tax Cuts - Forbes
- John McGuire Holds Narrow Lead Over Bob Good in Virginia’s 5th District - AP
- RFK Jr. Appears Unlikely to Make CNN Debate Stage – The Hill
- Race, Guns and Israel: Bowman and Latimer’s Heated Debate Moments – Politico
- The Politics of Memes: How Biden and Trump are Fighting Each Other on the Internet - AP
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
Mortgage Demand Flattens Even as Interest Rates Hit the Lowest Level Since March
Consumers seemed unimpressed by the latest drop in mortgage rates. Total mortgage application volume rose just 0.9% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.94% from 7.02%, with points decreasing to 0.61 from 0.65 (including the origination fee) for loans with a 20% down payment. That is the lowest level since March. Mortgage rates moved a little bit higher to start this week but then pulled back Tuesday after weaker than expected retail sales data.
Despite the drop, refinance demand, which is usually sensitive to weekly rate moves, dropped 0.4% for the week but was 30% higher than the same week one year ago. Rates are still slightly higher than they were a year ago. Mortgage applications to purchase a home rose 2% for the week and were 12% lower than the same week one year ago. Home sales have slowed even more recently amid volatile interest rates. The supply of homes for sale is as pricey as it is lean.
NASA Chooses Lockheed to Develop Next Gen Weather Satellites
NASA awarded a $2.27-billion contract to Lockheed Martin to develop and build a new weather-satellite constellation for the National Oceanic and Atmospheric Administration’s (NOAA) Geostationary Extended Observations (GeoXO) missions. The contract calls for Lockheed to deliver three spacecraft and includes options for four more. The GeoXO spacecraft is based on Lockheed Martin's modernized LM2100™ satellite bus and incorporates Lockheed’s SmartSat™ technology that will accommodate new software pushes and capabilities as data needs change over time.
The first GeoXO launch is planned for the early 2030s, and the satellite constellation will support NOAA's geostationary observations through the late 2050s. The GeoXO mission will extend the weather observation service provided by the Lockheed Martin-built GOES-R Series geostationary satellites – which collect atmospheric, hydrologic, oceanic, climatic, solar, and space data – adding new observations of oceans and air pollution, and deliver more accurate weather-forecasting information plus environmental data.
Read more at American Machinist
401(k) 'Millionaires' Surged in the Last Year: Fidelity
A record number of Fidelity 401(k) balances have topped the $1 million mark, thanks to robust stock market growth. The S&P 500 index gained more than 10% in the first quarter and is up 26% over the past 12 months. "Record-high contribution levels coupled with positive market conditions pushed average account balances to their highest levels since the fourth quarter of 2021," Fidelity reported. More than 485,000 Fidelity accounts had seven-figure balances at the end of the first quarter, a 15% increase from the end of 2023. A year ago, there were just 340,000 401(k) millionaires invested in Fidelity accounts. The average balance was $125,900 in the first quarter, which is 16% higher than the average a year earlier of $108,200. The data indicate that becoming a 401(k) millionaire takes commitment and patience, and that accountholders in general are doing a better job of saving for retirement. According to Fidelity:
401(k) millionaires have been saving for an average of 26 years.
The average contribution rate is 17%, counting employee and employer contributions.
The average 401(k) accountholder had a savings rate of 14.2% in the first quarter, an all-time high and an increase from the 2019 rate of 13.5%.
Boeing Sent Two Astronauts Into Space. Now It Needs to Get Them Home.
Boeing succeeded in getting NASA astronauts to the International Space Station, following weeks of delays. Returning them to Earth on the same spacecraft is proving another challenge. Problems with leaks and thrusters emerged after Boeing’s Starliner vehicle launched this month with the astronauts Barry Wilmore and Sunita Williams on board. Officials from the aerospace company and the National Aeronautics and Space Administration said Tuesday that the astronauts are slated to return June 26.
With the latest postponement, the astronauts would spend about 20 days in space, more than double the roughly eight days originally planned. Starliner has been pinned down by two main issues: a series of helium leaks in a propulsion system and problems with several thrusters that are used to maneuver the vehicle. NASA and Boeing teams have been studying both issues before they permit Starliner to attempt to leave the station with Wilmore and Williams, re-enter Earth’s atmosphere and land under parachutes.
Ford Plans Further Job Reductions in Germany, Spain, And UK:
Ford plans further job cuts in Germany, Spain and the U.K., the head of the worker's council in Germany for the U.S. automaker told Reuters on Tuesday. It is unclear how many additional job cuts are foreseen in Germany under the new restructuring plan, which comes on top of a previous restructuring program, said Benjamin Gruschka, who is head of the works council at Ford's Cologne plant. Gruschka added that a decision is expected by the end of June.
Ford has half completed its previous restructuring that called for 2,300 job cuts in Germany, reducing the staff number in the country to 13,000, according to Gruschka. Last year, Ford said it would cut 3,800 jobs in Europe as it shifts toward electric vehicle production, which requires less personnel. Ford said last week that it plans to cut up to 1,600 additional jobs at its assembly plant in Valencia, Spain, as part of the restructuring plan.
Read more at The Detroit Free Press
Chinese Automakers Seek Retaliatory Tariffs on EU Cars, State Media Reports
Chinese automakers have urged Beijing to hike tariffs on imported European gasoline-powered cars in retaliation for Brussels' curbs on exports of Chinese-made EVs, the state-backed Global Times newspaper said on Wednesday. In a closed-door meeting on Tuesday also attended by European car companies, China's auto industry "called on the government to adopt firm countermeasures (and) suggested that positive consideration be given to raising the provisional tariff on gasoline cars with large-displacement engines," according to the report.
The meeting, organised by China's Ministry of Commerce, was held in Beijing and attended by SAIC, BYD , BMW, Volkswagen and its Porsche division, two people with direct knowledge of the matter said. The main aim of the meeting was to put pressure on Europe and lobby against the tariffs Brussels announced last week to shield its car industry from Chinese competition, they added. The meeting was also attended by Mercedes-Benz, Stellantis and Renault, two separate sources familiar with the matter told Reuters.
Attracting Chip Talent in 2024 Requires New Strategies
In just three years, the semiconductor industry has undergone a remarkable transformation, evolving from an obscure technology sector to a dynamic and innovative market captivating global attention. As society’s awareness of our profound dependence on semiconductor chips in everyday life has expanded, so too has the industry’s significance, poised to reach a monumental milestone of a $1 trillion dollar industry by 2030.
Yet, amidst this promising trajectory, a pressing challenge looms large: by decade’s end, the industry could experience a shortfall exceeding 67,000 skilled technicians, computer scientists and engineers, according to a recent report by the Semiconductor Industry Association. Addressing this shortage is not only pivotal for sustaining the industry’s growth but also for fortifying its role as a cornerstone of technological progress worldwide.
Tropical Storm Alberto, First of the Atlantic Hurricane Season, Brings Flooding to Texas
The first tropical storm of the Atlantic season formed over the Gulf of Mexico Wednesday, the National Hurricane Center said. The tropical storm has been named Alberto. A Tropical Storm Warning was issued for the Texas coast from the San Luis Pass south to the mouth of the Rio Grande and the northeastern coast of Mexico from the Rio Grande mouth to Puerto de Altamira. The Atlantic hurricane season officially began June 1 and runs through the end of November, with most storm activity typically happening during the later months of that window, between mid-August and mid-October.
Forecasters said the storm could bring heavy rains, coastal flooding and gusty winds to the Texas and northeastern Mexico coasts through Thursday. Alberto is likely to reach the Mexican coast late Wednesday or early Thursday. On Wednesday morning, the National Hurricane Center said the storm system was "lumbering" towards the region at about 8 miles per hour. The National Weather Service said early rains had begun in Texas and that rain could impact the I-35 highway later in the day.
Solar is Growing Faster than any Electricity Source as Big Tech Seeks Clean Energy for Data Centers
Solar is booming in the United States as power demand surges, outpacing the growth of any other electricity source and disproving claims that the energy transition is a failure. To be sure, solar remains a small portion of total electricity generation in the U.S., standing at just 3.9% of the nation’s power mix in 2023 compared to the 43% share held by natural gas, according to the Energy Information Administration, the statistical unit within the Department of Energy.
Amazon, Microsoft, Meta Platforms and Google alone represented 40% of the demand for large, utility-scale solar projects in the U.S. over the past five years, according to a May research note from investment bank UBS. Renewable demand from these companies, which are all committed to 100% clean energy, is poised to climb — artificial intelligence requires 10 times more electricity than the typical Google search, according to UBS. Solar is forecast to make up 58% of new electricity generation installed in the U.S. in 2024, according to an estimate from the Department of Energy. A record 36 gigawatts of solar is scheduled to be added to the grid this year, nearly double last year’s increase, while battery storage will more than double to 14.3 gigawatts.