Market 05/20: FED members pessimistic about interest rate plans

Video: Super Profitable US Real Estate Investment Through Lending, Non-Performing Debt And Foreclosure - Private Lending, 2nd NPN And Foreclosure

In this week's PODCAST, Steve and Dan chat with Nico Nguyen, who has over 14 years in the real estate market, about an extremely interesting investment area: non-performing debt investment. This is a knowledge-packed podcast including:

- Debt investment (2nd Non-Performing Note)

- Foreclosure

- Private Lending/Seller Financing

- Asset protection and tax reduction (Assets Protection)

- Things to note when investing in short and mid-term rentals

Fed officials' statements: Bostic, Barr, Jefferson

1. Atlanta Fed President - Bostic

• It will take some time before we can be sure that inflation will fall back to 2%

• Inflation will continue to decline this year and into next year

• Fed's current policy stance is “tightening”

2. FOMC member - Barr

• Q1 inflation “disappointing”, not enough confidence to ease policy

• Fed needs to maintain even tighter policy to achieve inflation target

• Regulators considering adjustments to existing bank liquidity rules

3. Fed Board of Governors member - Jefferson

• Labor market more balanced and inflation declining, though not as fast as desired

• Too early to know whether the recent slowdown in the inflation process will persist.

China: economy more bad news than good - 1 trillion CNY rescue package for Real Estate rolled out

China's economic situation in recent weeks mixes bad and good news — but in reality more bad than good.

Bad news: Surveys show real estate market still sluggish, April capital outflow highest in 8 years

Real estate sector not very positive:

Reuters survey shows China housing prices will continue to fall with weak home sales:

• New home prices expected to fall -5.0% in 2024, compared to -0.9% decline in previous survey

• Home sales may fall -10.0% in 2024, higher than previous -5.0% forecast

Local government revenue from land sales to real estate developers in April down -21% Y/Y to 238.9 billion CNY - lowest since May 2016,

In April, net outflow reached record high:

• Domestic businesses / residents hoarding forex at highest value since 2016

  • Exporters limiting sales of received USD.

  • Residents stockpiling foreign currency for overseas travel.

• Net direct investment outflow (FDI outflow) reaches record high

China's total budget revenue down -2.7% Y/Y in first 4 months of 2024, after -2.3% Y/Y in Jan-Mar period

Chinese residents face utility cost burden as local governments sharply increase water, gas, electricity prices

Good news: Government rolls out unprecedented massive rescue package to save real estate market drowning in crisis

• PBOC facilitates additional 1 trillion CNY (138 billion USD) lending and relaxes mortgage borrowing rules, and local governments will buy back some unsold apartments

Chinese real estate stocks on track to extend 4-week uptrend due to government rescue package:

• Last week, RE stocks up 23%, best weekly gain in ~16 months

FYI: At this time of year, China usually draws down its copper metal reserves — however, with copper prices recently surging high, China is instead increasing its copper reserves:

• Related articles on Copper price: Market 05/16: Commodities hit peak

Japan: average wage increases 5.58%, 10Y JGB yield reaches decade high

Major Japanese companies agreed to a 5.58% average wage increase in the March shunto negotiations - the highest wage increase in 33 years

Japan's 10-year government bond yield reaches decade high due to expectations that BoJ will normalize interest rates and support the weak JPY.

Crypto Market: Venture capital inflows into cryptocurrencies show signs of recovery

Michael Sonnenshein resigns as CEO of cryptocurrency asset management firm Grayscale Investments.

A Bitcoin whale withdrew 15,670 BTC worth 1.04 billion USD from Coinbase Pro last week

Global venture capital inflows into crypto companies now at 2.4 billion USD in the first 3 months of 2024 — investor interest gradually returning:

Key events for the week 05/20 - 05/26: FOMC Minutes and NVDA ER

1. Existing home sales - Wednesday

2. Fed meeting minutes - Wednesday

3. New home sales data - Thursday

4. Durable goods orders data - Friday

5. A total of 18 Fed officials' speeches will take place this week

• This week's earnings release schedule:

  • Note: Nvidia Q1/2024 earnings report - Wednesday

Other news: Shipping rates rise again - Gold and copper hit new highs

1. Freight rates for goods from China to other destinations are rising rapidly again

   • Goods inflation in the West is very likely to rise in May/June.

2. Apple cuts iPhone 15 price by 20% in China as demand weakens

3. New York bill changes aim to reduce interest rates on defaulted sovereign bonds of emerging markets.

4. Copper and Gold metal prices have risen to all-time highs:

   • Copper price:

• Gold price is also anchored at all-time high