7. Home Prices to Median Income Increases by 50% vs. 1990
Chartr -As wage growth struggles to keep pace with home price inflation, buying a house has felt increasingly out of reach for millions of Americans recently — a trend that’s been ongoing for the last 3+ decades. Indeed, in 2023, a typical home in America will cost buyers 4.9x the median income. That’s a 50%+ increase on the 3.1x price-to-income ratio averaged in 1990 and only slightly below the record figure set in 2022, according to new analysis from the Harvard Joint Center for Housing Studies. Furthermore, this is a phenomenon that’s happening almost everywhere: a whopping 378 out of the 384 American Metropolitan areas (98.4%) that Chartr analyzed from the Harvard report saw rises between 1990 and 2023. Just 2 areas reported a home-price-to-median-income ratio that was the same as in 1990 and only 4 reported a drop.
Inflation continues to be the factor in how Americans perceive the economy — and the cost of houses is a major factor in that sentiment. Across the US, home prices have surged by 47% since the start of 2020 and have more than doubled since 2010, based on data from the NAR cited in the report. While new-home construction has fallen to a 4-year low, there’s also fewer existing homes entering the market. Rising interest rates have created a “golden handcuff” effect, discouraging homeowners from selling and taking on new, more expensive mortgages. Additionally, more homes are owned by older generations who are less likely to move. This has all culminated in a stark reality: you now need an annual income of $100,000 to afford a median-priced home in nearly half of all metro areas. As for renters? The majority of them are already declaring the American Dream of homeownership dead.
Insights-“Perfection is impossible. In the 1526 singles matches I played in my career, I won almost 80% of those matches. Now, I have a question for you. What percentage of points do you think I won in those matches? Only 54%. In other words, even top-ranked tennis players win barely more than half of the points they play. When you lose every second point on average, you learn not to dwell on every shot. You teach yourself to think, okay, I double-faulted … it’s only a point. Okay, I came to the net, then I got passed again; it’s only a point. Even a great shot, an overhead backhand smash that ends up on ESPN’s top 10 playlist. That, too, is just a point. And here’s why I’m telling you this. When you’re playing a point, it has to be the most important thing in the world, and it is. But when it’s behind you, It’s behind you. This mindset is really crucial because it frees you to fully commit to the next point and the next point after that, with intensity, clarity, and focus. You want to become a master at overcoming hard moments. That is, to me, the sign of a champion. The best in the world are not the best because they win every point. It’s because they lose again and again and have learned how to deal with it. You accept it. Cry it out if you need to and force a smile.” — Roger Federer https://fs.blog/
4. Bespoke Investment Group-Nearing 10x Sales for Large-Cap Tech
In today’s Chart of the Day we took a look at valuations across the Tech sector and how things stand relative to historical extremes. (It’s an eye-opening read, so make sure to check it out if you haven’t seen it yet.)
Below is a quick look at trailing 12-month price to sales ratios (P/S) over the last five years for the large-cap S&P 500 and small-cap Russell 2,000 along with each index’s respective Technology sector. As shown, the Russell 2,000’s price to sales ratio is just 1.25x, which is slightly below its average P/S ratio over the last five years. The Russell 2,000 Technology sector’s price to sales ratio is higher at 2.8x, but that’s still below the 2.9x P/S ratio for the S&P 500 as a whole. Incredibly, the S&P 500 Tech sector’s price to sales ratio has pushed all the way up to 9.8x, which is well above its high at the peak in late 2021. A 9.8x multiple is attractive if you’re looking at price to earnings (P/E), but for Tech stocks to be trading at 9.8x annual sales, that’s just a remarkably high number. (As mentioned, we’ve got further coverage of this topic in today’s Chart of the Day if you’d like to read more of our thoughts.)
Below is a look at the stocks in the large-cap Russell 1,000 that have seen the biggest increase in their price to sales (P/S) ratios since the current bull market began on 10/12/22. As shown, NVIDIA (NVDA) has seen its share price rise more than 1,000% during this bull market, but its P/S ratio has made 32 turns higher from 9.7x up to 41.9x! That’s by far the biggest jump of any stock in the index. Of the 30 stocks shown, the average P/S ratio has risen 9.6 points from 8.6x up to 18.2x, and most stocks on the list are Tech stocks.
5. The Bear Market in Diversified Portfolio Investing
Bloomberg Lu WangThe numbers are stark. Money managers who obeyed the financial industry’s age-old wisdom to divide investments across markets and geographies are on an epic losing streak versus those who simply bought the S&P 500 and sat still. In one example, out of roughly 370 asset-allocation funds tracked by Morningstar Inc., just one has managed to beat the index since 2009.
7. Solar High Use Hours…. Solar punches in and punches out-Moses Sternstein
One of the many challenges of relying on “renewable” energy sources is that they are unreliable. Solar energy does not work at night, and wind energy does not work if there is no wind.
Solar energy powers 70% of CA’s consumption at its peak . . . and 0% at its nadirs.
On the one hand, this is a very impressive accomplishment. That’s a lot of solar energy doing work. CA is basically incapable of building anything, so the fact that they got this much solar online is no small feat.
On the other hand, you can see why skeptics think that LNG in the near-term (and maybe nuclear in the longer-term) will have to be part of the picture. Solar energy is entirely useless between the hours of 8pm and 6am. For 14 hours per day though, solar is a beast.
Again, that doesn’t mean that battery storage won’t improve, or that we won’t develop clever ways of optimizing for solar when it’s available. There are many companies focused on various iterations of both of these solutions.
But it sure seems like solar has a long way to go before it becomes the thing.
Jun 19, 2024, 8:11 AM EDTSugary beverages can add about 500 calories a day to your diet, increasing your risk of heart-health issues. Start by cutting back on sodas, sweetened coffees, and alcohol. Oleh_Slobodeniuk/Getty Images
A cardiologist said the biggest heart-health mistake is waiting too long to make healthy changes.
Diet and exercise play a big role in preventing heart disease, heart attacks, and strokes later on.
A simple way to make your diet more heart-healthy is to switch up your drinks first.
If you want to live a long life, the best time to pay attention to your heart health is right now, according to a doctor.
The biggest mistake people make about heart health is waiting until it’s too late to take action, Dr. Gregory Katz, a cardiologist at NYU Langone, said.
“People think it’s something that happens suddenly. Sometimes they look up and are like, ‘How the hell did I have a heart attack or stroke?’ The seeds are planted very early on,” Katz told Business Insider.
Your habits today, such as eating well and exercising, can make a big difference in protecting your heart and preventing heart disease, heart attacks, and strokes later in life, he said.
While medication can help, patients sometimes put off taking drugs that could help them manage their risk in favor of trying to change their habits first.
“Taking medication is not a moral failing. That’s an important message,” Katz said.
The trick is focusing on changes you can actually stick to, he added.
“People are not honest with themselves about what lifestyle changes they’re actually going to make,” Katz said. “A large percentage of patients tell themselves they’ll make changes, and suddenly five years later, their cholesterol is still high.”
To make heart-healthy habits stick, focus on making small, sustainable changes — one of the simplest is reducing your sugar intake from drinks, Katz said.
In contrast, diets for better heart health involve eating lots of veggies, whole grains, legumes, and unsaturated fats such as olive oil, which help lower your cholesterol.
But it can be tough to transform your diet overnight, and making too many changes at once can backfire
One of the simplest ways to make your diet more heart-healthy is to cut back on sweetened drinks or boozy beverages, Katz said.
“Drinking calories and drinking alcohol are the biggest modifiable risk factors. The number of people I see drinking 500 calories a day blows my mind,” he said. “Just because it’s simple doesn’t make it easy.”
Evidence suggests that sodas, juices, sugary coffees, and cocktails can all contribute to health risks such as heart disease, type 2 diabetes, and cancer.
A dietitian previously told BI a good strategy to cut back on sweet drinks is to replace them with alternatives such as:
seltzer with a splash of fruit juice
unsweetened tea
water flavored with citrus or herbs such as mint
Swapping out liquid calories is a good first step to improving key factors for better heart health (and a longer life), such as healthy blood pressure and cholesterol levels and stable blood sugar.
1. NVDA Stats….Market Cap Passing Germany, France and UK
Jim Reid Deutsche Bank Some other remarkable stats:
Nvidia went from $2tn market cap to $3tn in 30 trading days from April 24th.
Nvidia has added a trillion dollars of market cap since May 20th. At 23 trading days this is the quickest a company has ever added a trillion dollars.
For context, Berkshire Hathaway, one of the most respected companies in the world, has taken around 135 years since its origins in the 1880 to get from zero to around $900bn today.
Nvidia, Apple and Microsoft are now worth a combined $9.95tn and look set to cross $10tn for the first time any day.
The last time the entire S&P 500 had a market cap of $10tn was in September 2010.
At the lows in 2009, the entire market cap of the S&P 500 was $6.11tn, less than double Nvidia today.
As it stands, Nvidia is on track to be the top-performing member of the S&P 500 for a second year running. In 2023, it was up +239%, ahead of Meta which had a +194% gain. In 2024 so far, Nvidia is up another +174%, far outpacing Constellation Energy in second place, which is “only” up 89%.
Exactly a decade ago the entire listed UK stock market was 400 times larger than Nvidia. In the last week Nvidia overtook it.
2. Technical Record? New Highs in Nasdaq with More Stocks Making 52-Week Lows
3. Only 1% of Small Cap Stocks at 52-Week Highs
4. Mortgage Rates Drop Below 7%
5. Robinhood 24 Hour Market….$20B in Overnight Trading
7. Gen Z Comfortable with “substantially more financial risk”
Barrons By Paul Andrews However a recent survey conducted by CFA Institute found a very different mindset among Gen Z investors. Those attitudes were forged in the fire of the Covid lockdowns from 2020 to 2022. Today they are shooting through our financial system, creating pressures that could cause problems down the road.
Our survey found that Gen Z is comfortable taking substantially more financial risk than previous generations were. In fact, they believe it’s necessary, with fully half of them saying they were comfortable taking significant financial risks to achieve their wealth goals. They told us they thought taking those risks was necessary because they believe the economic conditions they face were more challenging than any time in history.
That doesn’t strike my boomer ear as historically correct, but the reality almost doesn’t matter. It’s their perception, and it’s shaping their behavior.
Gen Z also has a surprising degree of confidence in its financial knowledge. Almost half said they knew more about investments than their parents, and about a third said they were very or extremely confident in their ability to make financial decisions.
But at the time of the survey, Gen Z’s No. 1 investment product was crypto. You’d think perhaps the remarkable risk inherent in that asset class, combined with the significant valuation beating it took, would have dented the Gen Z financial mindset. But with crypto’s remarkable rebound, apparently little has changed. https://www.barrons.com/articles/gen-z-investors-risk-advisors-26fe6c1e?mod=past_editions
Post Elections….India (INDA) makes new highs vs. Mexico (EWW) -17%….EWW holding 2023 lows right now.
9. China to Regulate Lithium Battery Industry
China to regulate lithium-ion battery industry amid fast expansion By Reuters
HONG KONG/BEIJING, June 19 (Reuters) – China’s Ministry of Industry and Information Technology on Wednesday issued new guidelines for its lithium-ion battery industry, aiming to transform, upgrade and promote high-quality development amid rapid expansion in the sector.The guidelines, following a proposal in May, will help firms scale back manufacturing projects that only expand production capacity, while enhancing technology innovation and product quality and trimming output costs, the ministry said. Advertisement · Scroll to continue Projects built on farmland and ecological zones would be required to be shut down, or strictly reined in and gradually removed. Rapid expansion of production capacity along the lithium battery supply chain has led to a plunge in prices for products, including battery and raw materials, eroding companies’ profits in the world’s biggest market. Industry planning and launch of new projects should be in line with national development of resources, ecological protection and energy saving management, the ministry said. Advertisement · Scroll to continue Reporting by Farah Master, Ella Cao and Siyi Liu; Editing by Christopher Cushing and Bernadette Baum
Uranium vs. Lithium Chart…..LIT Lithium ETF about to make new lows.
7. Millionaires Fleeing China and….UK???
By Devon Pendleton-(Bloomberg) — The UK is on track to lose 9,500 millionaires this year, more than any country in the world except China, according to a new report on the migration intentions of the world’s wealthy. It’s more than double the number that left the country in 2023 and lags only China, which is expected to lose 15,200 millionaires this year, according to the Henley Private Wealth Migration Report, authored by migration advisory Henley & Partners. “As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty, and social upheaval, millionaires are voting with their feet in record numbers,” Dominic Volek, Henley’s group head of private clients, said Tuesday in a statement. Read More: Britain’s Rich Race to Save Their Wealth From Election Hit The report’s numbers refer to net arrivals and exits, reflecting where millionaire populations are growing versus shrinking. Henley’s research partner New World Wealth estimated the migration figures based on relocation data, investment migration program statistics and interviews with intermediaries in the wealth industry. The estimate comes as Britain girds for an election in just over two weeks where the opposition Labour Party, which is advocating for some higher taxes on the wealthy, has about a 20- point lead over the ruling Conservatives. The recent uptick in departures of Britain’s ultra-wealthy residents is the acceleration of a trend that began around the time of Brexit. From 2017 through last year, the country lost 16,500 millionaires to migration, according to the report. The exodus is a reversal for the country that for decades served as a magnet for rich families from Europe, Asia, Africa and the Middle East, who mainly flocked to London. More than 7% of the millionaires projected to move globally this year will be leaving the UK, the report shows. That reflects “a steady accumulation of factors” that are making the country less appealing to the rich, including Brexit, the energy crisis from the war in Ukraine and the subsequent rise in inflation, said Hannah White, chief executive officer of the Institute for Government in London. “The outflow of high-net-worth individuals already generated by the economic and political context is now being accelerated by policy decisions ahead of the election,” she wrote in an analysis accompanying the Henley report.
8. What Retail Apocalypse? Shopping Centers Are Making a Comeback-NYT
By Joe Gose-NY Times Vacancy is the lowest it has been in two decades, at 5.4 percent, according to a recent report. The properties are thriving even as retailers like Macy’s and Express shutter many stores. Shopping center landlords have found themselves in a wholly unfamiliar position: For the first time in 20 years, demand for retail space outstrips supply. That demand has soared recently and, after years of muted construction and a purge of weak-performing properties, met a retail market with less available space. Properties that survived the purge signed up tenants that would draw more shoppers and give them more reason to linger. That meant more restaurants and venues that promote recreational experiences, like ax throwing and, more recently, pickleball. It also meant less space for traditional retailers that weren’t performing as well, like bookstores and apparel brands. Because of those moves, “there’s not as much redundancy from tenants, and landlords are creating much more robust tenant mixes,” said Barrie Scardina, president of Americas retail services, agency leasing and alliances for Cushman & Wakefield, a real estate firm. “We are seeing some of the most productive occupancy recorded in the last 10 years.” Shopping center vacancy is the lowest it has been in two decades, at 5.4 percent, Cushman & Wakefield said in a recent report, and the edge in lease negotiations has shifted from tenants back to landlords.
The number of homes for sale in Cape Coral, FL and North Port, FL surged roughly 50% from a year earlier in March—more than anywhere else in the country. And in McAllen, TX, supply jumped 25%.
Housing supply is soaring because both states have been building a lot of homes, which is limiting home price growth. Buyer demand is also lackluster because many people are priced out. And in Florida, an insurance crisis is throwing a wrench into deals.
Nationwide, new listings slowed in March as mortgage rates remained elevated. The Fed recently warned rates are likely to stay high longer than expected.
On the west coast of Florida, housing supply is surging, sellers are cutting their asking prices and the time it takes to sell a home is soaring—all at a faster rate than anywhere else in the U.S. The story is similar in parts of Texas. Florida and Texas have been building more homes than anywhere else in the country, partly to accommodate the flood of newcomers that showed up during the pandemic homebuying boom. But the boom is over, in part because many people have been priced out. Now, homes are sitting on the market and price growth is stagnating. Here’s how these trends showed up in U.S. housing-market data for March, which covers 85 major metropolitan areas:
Supply: Of the 10 metro areas that posted the largest year-over-year increases in supply, six are in Florida and two are in Texas. Cape Coral, FL saw the biggest jump in homes for sale (51%), followed by North Port-Sarasota, FL (48%), Fort Lauderdale, FL (30%), Tampa, FL (29%), McAllen, TX (25%), Orlando, FL (23%), Knoxville, TN (23%), Dallas (20%), West Palm Beach, FL (20%) and Cincinnati (17%).
Price drops: Of the 10 metro areas where sellers were most likely to cut their list prices, five are in Florida and two are in Texas. In North Port-Sarasota, 48% of listings had a price cut—the highest share in the country. Next came Tampa (44%), Indianapolis (43%), Cape Coral (41%), Denver (37%), Orlando (35%), Portland, OR (34%), Houston (33%), San Antonio (33%) and Jacksonville, FL (33%).
Prices: Median sale prices fell from a year earlier in three metros, one of which is in Florida and one of which is in Texas: North Port-Sarasota (-4.6%), Oklahoma City (-1.5%) and San Antonio (-0.3%). Prices climbed least in Austin, TX (0%), El Paso, TX (0.5%), Memphis, TN (0.7%), Tampa (1.1%), Salt Lake City (1.1%), Omaha, NE (1.2%) and Charleston, SC (1.2%).
Speed of sales: Of the 10 metros that saw the biggest upticks in median days on market, two are in Florida and two are in Texas: In Cape Coral, the typical home took 31 more days to sell than a year earlier—the largest jump in the nation. Next came North Port-Sarasota (20), McAllen (20), New Orleans (18), Tulsa, OK (13), Cincinnati (13), San Antonio (10), Greensboro, NC (8), Honolulu (7) and Knoxville (7).
“Out-of-town homebuyers no longer see Florida as a place to get amazing value. Now they’re moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too,” said Eric Auciello, a local Redfin sales manager. “Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today. Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost. The Tampa metro has been faring a bit better.”
Dan Dennett explained that it began as a survival mechanism. It’s important to predict how someone else is going to behave. That tiger might be a threat, that person from the next village might have something to offer.
If we simply wait and see, we might encounter an unwelcome or even fatal surprise. The shortcut that the intentional stance offers us is, “if I were them, I might have this in mind.” Assuming intent doesn’t always work, but it works often enough that all humans embrace it.
There’s the physical stance (a rock headed toward a window is probably going to break it) and the design stance (this ATM is supposed to dispense money, let’s look for the slot.) But the most useful and now problematic shortcut is imagining that others are imagining.
There used to be a chicken in an arcade in New York that played tic tac toe. The best way to engage with the chicken game was to imagine that the chicken had goals and strategies and that he was ‘hoping’ you would go there, not there.
Of course, chickens don’t do any hoping, any more than chess computers are trying to get you to fall into a trap when they set up an en passant. But we take the stance because it’s useful. It’s not an accurate portrayal of the state of the physical entity, but it might be a useful way to make predictions.
There’s a certain sort of empathy here, extending ourselves to another entity and imagining that it has intent. But there’s also a lack of empathy, because we assume that the entity is just like us… but also a chicken.
The challenge kicks in when our predictions of agency and intent don’t match up with what happens next.
AI certainly seems like it has earned both a design and an intentional stance from us. Even AI researchers treat their interactions with a working LLM as if they’re talking to a real person, perhaps a little unevenly balanced, but a person nonetheless.
The intentional stance brings rights and responsibilities, though. We don’t treat infants as though they want something the way we might, which makes it easier to live with their crying. Successful dog trainers don’t imagine that dogs are humans with four legs–they boil down behavior to inputs and outputs, and use operant conditioning, not reasoning, to change behavior.
Every day, millions of people are joining the early adopters who are giving AI systems the benefit of the doubt, a stance of intent and agency. But it’s an illusion, and the AI isn’t ready for rights and can’t take responsibility.
The collision between what we believe and what will happen is going to be significant, and we’re not even sure how to talk about it.
The intentional stance is often useful, but it’s not always accurate. When it stops being useful, we need to use a different model for how to understand and what to expect.
Marketwatch By Mark Hulbert This is illustrated in the accompanying chart, which plots the performance of a hypothetical strategy that each year invested in the U.S. stock with the largest market cap at the end of the prior year. Notice that the strategy significantly lags the S&P 500 SPX.
10. Surgeon General: Social media needs cig-like warning
MorningBrew
The top health official in the US is urging Congress to pass legislation that would stamp social media apps with a surgeon general’s warning “stating that social media is associated with significant mental health harms for adolescents,” he wrote in an op-ed for the New York Times yesterday. Upping the pressure: Surgeon General Dr. Vivek Murthy’s push for a warning label follows years of alarm-sounding with his strongest appeal to lawmakers yet.
In his statement, Murthy referenced a 2019 study that found risks of depression doubled among teens who scroll for more than three hours per day, and a 2023 Gallup poll showing that US teens log a daily average of 4.8 hours on social media.
“Why is it that we have failed to respond to the harms of social media when they are no less urgent or widespread than those posed by unsafe cars, planes or food?” Murthy wrote, alluding to driverless car permits getting rescinded, Boeing groundings and listeria-related dairy recalls this year.
Adding a warning label is likely to make some parents think twice about unsupervised scrolling, according to a recent Brookings study. Still, Murthy acknowledged that it wouldn’t be enough to make social media a kid-friendly space. So, he also asked Congress to pass measures that would:
Protect minors from online abuse and exposure to inappropriate content, bar social media platforms from gathering sensitive data from child users, and set limits on features including push notifications, autoplay, and infinite scrolling.
Require social media companies to be publicly transparent about their platform’s mental health effects and undergo independent safety audits.
Some states are already grinding. Laws enacted in Florida and Utah since March 2023 have raised the minimum age for social media account ownership. A recently passed New York bill that would ban companies from sharing children’s data and using algorithms in their feeds is awaiting the governor’s signature. More than 40 states have also sued Meta, alleging that it intentionally tries to get kids addicted to its platforms.—ML
