The Best Daily Financial Market Highlights - August 23rd, 2022
💎Happy Tuesday, Steemers!
INFLATION
- GOLD: $1,739 (-0.36%)
- AVG GAS: $3.90
- 2022 CPI: 8.5%
Inflation numbers as of August 22nd
DIY Driving
Tesla is raising prices by 25% for its Full Self-Driving, FSD, service.
As of right now, customers will pay upfront $12,000 for FSD, or choose a $199/month subscription.
On September 5th, prices will jump to $15,000.
What is FSD? All Tesla vehicles come with “Traffic-Aware Cruise Control” and “Autosteer” which keep the vehicle in its lane and match the speed of surrounding traffic. The FSD package adds more advanced autopilot controls, like “Traffic and Stop Sign Control” and “Navigate on Autopilot”.
“I Have a Bad Feeling About This”
A survey showed that 59% of Americans think student loan forgiveness is going to fan the flames of inflation.
Only 32% are in favor of complete student loan forgiveness.
Men and citizens over 65 years old were the most common demographic to be against any student loan forgiveness at all.
During President Biden’s presidency, $32 billion in student debt has been forgiven, hardly making a dent in the enormous $1.7 trillion total.
Borrowers are expecting big news this next week, including a possible $10,000 of forgiveness per borrower, and a further extension on repayments, which have been paused for two years.
Meeting of the Bankers
Jackson Hole, Wyoming - This Friday, central bankers from around the world will meet in Wyoming to talk about economies, inflation, and everything in between. The U.S. Federal Reserve's officials will be in attendance.
- Chairman Jerome Powell is expected to speak.
STOCKS
- DOW: 33,063 (-1.91%)
- S&P: 4,137 (-2.14%)
- NASDAQ: 12,381 (-2.55%)
Stock numbers as of market close on August 22nd
The Final Act
AMC (AMC -41.95%) tanked on Monday after another competitor warned about upcoming bankruptcy.
Regal Cinemas owner warned of potential bankruptcy.
Last week, another rival (Cineworld) said it's considering filing bankruptcy.
Shares of AMC sank 26% last week and 30% so far this week…
It’s no secret: The theater industry is struggling, and things might never be the same. Since the pandemic, there have been 30% fewer movies released in theaters.
It's more expensive for theaters to own disruption rights and production companies are releasing movies directly to streaming platforms.
The Chopping Block
Ford (F -5.04%) is cutting 3,000 jobs, a majority in North America.
The cuts will remove 2,000 salaried positions and 1,000 agency jobs.
Ford is in the middle of making drastic company changes, with a goal to cut structural costs by $3 billion in the next four years.
CRYPTO
- BTC: $21,282 (-0.54%)
- ETH: $1,624 (+1.51%)
- SOL: $35.23 (-2.97%)
Crypto numbers as of 5:00 pm EST on August 22nd
The Crypto Clash
The Federal Reserve wants a digital dollar.
In fact, many lawmakers on both sides of the political spectrum are in support.
Why a digital dollar? Taking the dollar virtual could be a crypto-friendly breakthrough. Its goal would be to transform payment systems, big banks, and the virtual asset industry itself.
Who’s against it? Big banks and crypto brokers. They want Washington to stay away for fear of more rules and regulations on the crypto market.
How will it work? It will be set up similar to the physical dollar; consumers would conduct transactions using digital wallets that would likely be maintained by banks.
At least 25 countries have launched or piloted their own central bank digital currencies.
Job Cuts and Renovations
After cutting thousands of jobs last week, Crypto.com will move forward with a multimillion-dollar renovation of its premier sports arena.
- Formerly known as the Staples Center, Crypto.com bought the naming rights to the building for $700 million last year.
Yesterday, Crypto.com tweeted its plans for renovations on the arena.
Expectedly, reactions on Twitter were very mixed.
REAL ESTATE
- 15-year: 4.98%
- 30-year: 6.37%
Mortgage rates via Quicken Loans as of 5:00 pm EST.
Recession Fears Fuel Housing Doubt
The housing market is experiencing lower sales and higher mortgage rates.
That combination has resulted in a slowdown, but other fears are giving homebuyers cold feet.
Recession: Recession fears are impacting potential buyers - they are consuming more information about the economy and doing nothing out of fear.
- The “doing nothing part” is bad for the market because they aren’t buying homes.
Home builders are also starting to use that term.
Builders from the National Association of Home Builders said rising interest rates, construction costs, and supply-chain issues have brought on a “housing recession.”
(Some) Buyers on top: In some ways, the iffy market is good for buyers with patience. Buyers are taking their time and asking for more out of sellers.
“I got one house that they gave me 37 post-home inspections requests. I almost fell off my chair. And this is a house that’s 40 years old.” - Realtor in Massachusetts.
GLOBAL SCOOP
- VIX: (+17.67%)
- WHEAT: (+0.64%)
- CORN: (+0.88%)
Global Scoop numbers as of market close on August 22nd
Big Ben-Size Issues in Europe
Issue #1: Energy
European gas prices surged over the weekend after Russia announced the shutdown of the Nord Stream 1 pipeline for maintenance.
- It will be suspended from Aug. 31 to Sept. 2.
The Nord Stream pipeline is only operating at 20% of the agreed upon volume (much of Europe relies on this pipeline).
Russia blamed faulty equipment for the drop in gas supplies. Some countries think the pipeline squeeze is a political maneuver by Russia.
A European benchmark for natural gas trading jumped 19% on Monday.
Issue #2: Inflation.
Citi economists are predicting that U.K. inflation is on course to exceed 18% in January.
- The country’s energy price cap is soaring with no end in sight.
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