🏚 Stuck

Plus: Dollar juggernaut | Monday, October 03, 2022

Open in app View in browser   Presented By Percent   Axios Markets By Emily Peck and Matt Phillips · Oct 03, 2022 Monday! We're back at it. It's go-time, people. The fourth quarter. When the rubber hits the road. Let's do it. Today's newsletter is 654 words, 3 minutes.     1 big thing: Nowhere to go Illustration: Lindsey Bailey/Axios   The housing market is stuck. Home prices are mostly too high to appeal to buyers facing skyrocketing mortgage rates, Emily writes. Why it matters: People expecting a big housing crash might not see it happen so fast. Home sellers don't have to sell right away, especially because the vast majority have mortgages with low rates that they couldn't get now (aka "Golden handcuffs.") The housing market isn't a "clearing market," like the stock market, where you put something up for sale and take whatever price you can get, notes Steven Abrahams, Amherst Pierpont Securities' head of investment. What's happening: With home sales plunging, the big price gains we've seen over the past two years are "decelerating" at record levels, according to data out last week from Case-Shiller. Anyone who wanted to sell their house in 2022 rushed to do it earlier this year when the signs were clear that mortgage rates would be rising, said Daryl Fairweather, chief economist at Redfin. "That's contributing to how dead it is right now." What to watch: The job market. Unemployment can unstick a lot of things for reluctant home sellers. Go deeper.     2. Catch up quick 🔄 Truss reverses plan to cut U.K. tax rate on high earners. (Axios) 🚘 Tesla Q3 deliveries miss estimates, slowed by logistic snarls. (Bloomberg) 🦾 Elon Musk unveils prototype humanoid Optimus robot. (The Verge) 🛢 OPEC+ to weigh production cut to bolster oil prices. (WSJ)     3. Another tough one for stonks Data: FactSet; Chart: Erin Davis/Axios Visuals For Wall Street investors, the third quarter ended much as it started: drenched in red ink, Matt writes. Driving the news: Friday's 1.5% drop meant the S&P 500 ended the third quarter down 5.3%. Its third-straight decline. In fact, the benchmark index was down 9.3% during September, its worst monthly showing since March 2020. The bottom line: With the Fed resolutely pursuing a rate-rising policy to get a grip on inflation, more pain could be ahead as we head to year-end.     A message from Percent Trying to find sizable returns in today's market?     Percent makes private credit markets accessible, offering accredited investors high-yield, short-duration investment options — including small-business financing, venture debt and consumer loan portfolios. Get up to 20% annual returns on vetted and largely uncorrelated offerings.     4. 🔥 Job market temp check Illustration: Aïda Amer/Axios   Fresh data coming this week will offer more clues about one of the great puzzles of the moment: The labor market. How long can it stay so strong? Driving the news: A one-two punch from the Labor Department, which releases hiring and quits numbers on Tuesday in the JOLTS report, will be followed by the September jobs data due Friday morning, Emily writes. What to watch: The ratio of job openings to unemployed workers is something Federal Reserve chair Jerome Powell likes to refer to when talking about the overheated labor market. In a report out Monday, Indeed.com goes deep on the retail sector, which has seen some slowing in hiring, but not much in the way of layoffs. That could be the mythical "soft landing" that some folks still talk about, Nick Bunker, the site's head of research, said. "It's unclear if this could happen in the labor market overall," he said. "But worth noting." Read more.   Share Axios and earn rewards If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. Be a good friend and share   5. The indefatigable dollar Illustration: Brendan Lynch/Axios   The U.S. dollar begins the final quarter of 2022 bolstered by the same fundamentals that propelled it against major currencies for most of the year, Axios' Javier E. David writes. Why it matters: A strong dollar is a brake against inflation that's still running uncomfortably high, for both consumers and the Federal Reserve. Yet U.S. multinationals that operate in markets where native currencies have weakened are poised to lose money when those revenues are translated into dollars. Driving the news: Last week, White House economic adviser Brian Deese downplayed the possibility that the U.S. would act to slow its juggernaut currency, trading close to its highest levels in about 20 years. Yes but: As Bloomberg Opinion's John Authers wrote on Friday, there are a host of reasons America shouldn't countenance the idea, even if it wanted to. The bottom line: "Policymakers [are] stepping up efforts to stem FX volatility, but evidence from UK, Japan China suggests unilateral measures insufficient to reverse trend," Bank of America analysts wrote recently. The U.S. won't act unless there's "direct blowback from [a] strong USD." Go deeper.     A message from Percent Get up to 20% APY with private credit — even in this climate     With market volatility, institutional players are deploying capital into private credit in search of uncorrelated returns. Percent's investment platform enables accredited investors to tap into this exclusive, $7 trillion asset class. Diversify your portfolio with private credit.   📚 1 thing Emily loves: Hilary Mantel's "Wolf Hall" trilogy, a series of novels that detail the rise and fall of Thomas Cromwell, the son of a blacksmith who was also Henry VIII's fixer. The books are a dramatic and detailed deep dive — each one ends with a beheading! — into a bygone era that makes today's political dramas seem almost cheerful. Mantel died last week at the age of 70. Last month, in an interview with the Financial Times, she was asked if she believed in an afterlife. "Yes. I can't imagine how it might work," she said. "However, the universe is not limited by what I can imagine." Why stop here? Let's go Pro. Join the thousands of professionals using Axios Pro to keep up with the companies, deals and trends changing their industries.   Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here. Sponsorship has no influence on editorial content. 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