—— U.S. Existing Home Sales Fall for Second Month; Population Exodus Costs Massachusetts $1B; NYC Basement Flood Risk High; Global Luxury Stocks Slide; NYSE Parent Fined $10M; Swing States Fear Election Violence; Target Issues Warning, Shares Drop 9%
1. U.S. Existing Home Sales Fall for Second Month
According to data released today by the National Association of Realtors (NAR), U.S. existing home sales in April fell 1.9% month-over-month to a seasonally adjusted annual rate of 4.14 million, below economists’ forecast of 4.23 million.
NAR Chief Economist Lawrence Yun said U.S. home prices hit a new high in April, which is good news for homeowners. However, as inventory increases, price growth for existing homes may slow.
In October of last year, U.S. homebuying demand hit a 13-year low but has gradually recovered since. Due to tight supply, home prices have still not declined.
In early 2021, mortgage rates were around 3%, and the annualized existing home sales were 2 million higher than now. Over the past few months, inventory has gradually risen as many homeowners can no longer delay moving.
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2. Population Exodus Costs Massachusetts $1B
Research from Boston University’s Questrom School of Business finds that high taxes and housing prices in Boston may drive out more wealthy residents, cutting state tax revenues by at least $1 billion annually by 2030.
During the pandemic, Massachusetts saw an accelerated outflow of residents, as many could work remotely from more comfortable and affordable nearby states. If the trend continues, the state could lose 96,000 residents annually before 2030, with a combined pre-tax income of $19.2 billion.
Last year, 39,000 people moved to other states, with Florida and New Hampshire being the most popular destinations.
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3. NYC Basement Flood Risk High
A new survey by the Federal Reserve Bank of New York finds that basement residents in the city face growing financial risks as heavy rainfall becomes more common.
Currently, over 10% of low-income immigrants and people of color live in flood-prone basement apartments.
Due to sewer systems being unable to keep up with rainfall, basements are increasingly at risk of flooding. The study found that basements near the coast cost $200 more per month to rent, reflecting higher expected repair costs from floods.
About 4% to 6% of low-income residents may have to bear the economic loss from flood damage themselves.
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4. Global Luxury Stocks Slide
Today, the Euro Stoxx Luxury 10 Index fell as much as 1.9% after privately held luxury giant Chanel released its 2023 financial report. Though Chanel’s revenue grew over 10%, its outlook was cautious.
Chanel’s global CFO Philippe Blondiaux said the company saw rapid growth over the past three years but now faces a more challenging market.
Luxury stocks have been highly volatile this year. Kering issued disappointing guidance and a warning. Post-pandemic recovery in China is fading, and global consumers are becoming more cautious.
Today, Hermès shares dropped as much as 4.3%, while Kering and LVMH each declined over 2%.
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5. NYSE Parent Fined $10M
Intercontinental Exchange (ICE), parent company of the NYSE, has agreed to pay a $10 million fine after failing to promptly notify the SEC about a 2021 hacking incident.
In April 2021, the SEC said ICE failed for several days to alert legal and compliance officers, as well as multiple global trading platforms, after detecting a cyber intrusion. SEC rules require ICE to disclose incidents immediately.
The SEC stated that ICE’s investigation found the breach did not result in material financial loss or significant risk.
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6. Swing States Fear Election Violence
According to the latest Bloomberg survey, 50% of voters in U.S. swing states are concerned that the election outcome could spark widespread violence—an equally high percentage among both Democratic and Republican voters.
This month, Trump led Biden by only 4 points across seven key swing states.
60% of swing-state voters worry about misinformation; 46% fear foreign interference; and a small percentage lack confidence in the fairness of the election.
After the 2020 election, multiple riots occurred, including police killings that fueled the Black Lives Matter movement.
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7. Target Issues Warning, Shares Drop 9%
Today, Target released its latest earnings report, showing that in the quarter ending early May, same-store sales fell 3.7%, though online sales declines slowed.
Target warned that consumers may reduce spending on discretionary items in the coming months. Its shares fell 9.1% today.
Adjusted EPS reached $2.03—falling short of expectations for the first time in several quarters.
Chief Growth Officer Christina Hennington said short-term demand for non-essentials will be affected. Demand for home goods and large appliances is weak, with apparel being one of the few bright spots.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.