EGRNF - Wall Street Breakfast Podcast: Home Sales Slump Rates Increase

2023-08-18 06:37:49 ET

Summary

• U.S. home sales experience first monthly slump since April and interest rates rise.
• China Evergrande files for Chapter 15 bankruptcy protection in New York.
• CVS Health loses PBM contract, but reaffirms guidance and outlook.

Listen below or on the go on Apple Podcasts and Spotify U.S. home sales see first monthly slump since April while long-term mortgages exceed 7% . (00:34) China Evergrande ( EGRNF ) files for Chapter 15 bankruptcy in New York. (01:58) CVS Health ( CVS ) says no near-term impact from PBM contract loss. (02:24)

This is an abridged transcript of the podcast.

U.S. home sales in July experienced the first monthly decline since April, Re/Max Holdings ( RMAX ) reported Thursday, as the supply of homes for sale increased alongside interest rates.

Home sales slumped 14.7% from June and 16.1% from a year before, coinciding with new listings dropping 9.0% M/M and 26.7% Y/Y across the 50 metropolitan areas that RMAX surveyed.

Even so, consumer demand for housing remained strong. Inventory gained 3.1% in July and lagged 20.8% from July of last year, and the median sales price stayed elevated at $425K, down less than 1% M/M and up 1.2% Y/Y.

Meanwhile, long-term mortgages exceeded 7% this week as the economy continues to do better-than-expected, according to the Freddie Mac Primary Mortgage Survey.

30-year fixed-rate mortgages averaged 7.09% as of Aug. 17, up from last week when they averaged 6.96% and 5.13% in the year-ago period.

15-year fixed-rate mortgages averaged 6.46%, up from last week when they averaged 6.34% and 4.55% a year ago.

Struggling property developer China Evergrande ( OTC:EGRNF ) has filed for Chapter 15 bankruptcy protection in a Manhattan bankruptcy court.

The development comes after the company reached a restructuring plan with creditors in March. The company had $300B in liabilities.

In July, China Evergrande ( OTC:EGRNF ) said it had an $81B total loss for 2021 and 2022.

CVS Health (NYSE: CVS ) sought to calm investors on Thursday after Blue Shield of California announced a new arrangement for pharmacy benefits management, replacing CVS Caremark.

The announcement weighed on CVS ( CVS ) shares and those of its rivals in the PBM market, while the drug-saving platform GoodRx Holdings (GDRX), which partnered with the company to lower out-of-pocket drug costs, also came under pressure.

CVS said the partial loss of the Blue Shield contract will not impact its previously announced guidance and will only have an immaterial impact on the longer-term outlook.

CVS Health ( CVS ) reaffirmed its guidance and outlook.

Other headlines to look out for on Seeking Alpha:

Instacart plans for IPO as soon as next month - report

Ford, South Korean firms to build $886M EV battery materials plant in Quebec

U.S. to impose tariffs on tin-plated steel imports from China, Germany, Canada

U.S. stocks on Thursday slipped to a third straight day of losses.

The Nasdaq ( COMP.IND ) fell 1.17%. The S&P 500 (SP500) declined 0.77% while the Dow ( DJI ) slipped 0.84%.

All 11 S&P sectors - with the exception of Energy - ended in the red, with Consumer Discretionary and Tech among the top losers.

Treasury yields were mixed, with the 10-year yield (US10Y) up 3 basis points to 4.29% and the 2-year yield (US2Y) down 4 basis points to 4.94%.

And the number of Americans filing for jobless claims in the past week rose slightly more than expected, pointing to resilience in the labor market.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the red. The Dow is down 0.1%, the S&P 500 is down 0.2% and the Nasdaq is down 0.3%. Crude oil is down 0.08% at more than $80 a barrel. Bitcoin is down 7.2% at less than 27,000.

In the world markets, the FTSE 100 is down 0.8% and the DAX is down 0.5%.

The biggest stock movers for the day premarket: First, a top gainer. Discount retail Ross Stores (NASDAQ: ROST ) is up 5% after the company exceeded expectations in Q2.

And one of the biggest losers, luxury fashion brand Farfetch Limited (NYSE: FTCH ) is down more than 38% following mixed Q2 results and a disappointing outlook.

On today’s economic calendar at 1pm the Baker-Hughes rig count.

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