1. US Mortgage Rates Drop to New Low Since June;
2. US Consumer Confidence Surges Across the Board;
3. Goldman Exec Fined $390,000 Over Insider Trading;
4. China Aoyuan Files Chapter 15 Bankruptcy;
5. Brookfield Avoids Default on London Skyscraper;
6. Tesla Stock Trails Market Dramatically;
7. US Bond and Stock Rally Raises Concern.
1. US Mortgage Rates Drop to New Low Since June
According to data released today by the Mortgage Bankers Association (MBA), the 30-year fixed mortgage rate dropped by 24 basis points in the week ending December 15, reaching 6.83%—its lowest since June.
However, MBA’s purchase application index declined by 0.6% from its August peak, and combined purchase and refinancing applications fell 1.5%, the lowest since late October.
Despite still-high mortgage rates, five straight weeks of declines remain good news. The yield on 10-year US Treasury bonds—closely tied to mortgage rates—has fallen over 1% from its October peak as markets anticipate Fed rate cuts next year.
While demand for new homes remains solid, existing home sales continue to struggle due to tight inventory.
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2. US Consumer Confidence Surges Across the Board
The Conference Board reported today that US consumer confidence jumped from 101 in November to 110.7 in December—the biggest monthly gain since early 2021.
Americans are feeling more optimistic about the economy, wages, and the job market, while inflation expectations have fallen to their lowest since late 2020.
The report reflects broad optimism across nearly all areas of consumer sentiment, with more Americans planning to purchase cars, travel, or buy large appliances.
Still, two-thirds of Americans believe a recession of some kind may hit the economy next year.
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3. Goldman Exec Fined $390,000 Over Insider Trading
A New York federal judge today ordered former Goldman Sachs VP Brijesh Goel—convicted of insider trading—to reimburse the bank $390,000 for legal costs.
Goldman had hired Milbank LLP to conduct the internal investigation. In June, Goel was found guilty of passing insider information to a friend, who used it to earn $280,000 in illegal trades.
In a ruling last month, Goel was ordered to forfeit his own profits of $85,000.
Goel petitioned the court to reduce the penalty amount, but the request was denied.
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4. China Aoyuan Files Chapter 15 Bankruptcy
Chinese real estate developer China Aoyuan has filed for Chapter 15 bankruptcy protection in New York, allowing its overseas assets to be shielded during restructuring.
Last month, Aoyuan said its restructuring plan had secured sufficient creditor support and that it would seek approval from a Hong Kong court in January.
Other developers, including Evergrande, have filed similar Chapter 15 protection in recent years.
Goldman Sachs led Wall Street in equity underwriting fees in the first nine months of 2023, earning $901 million.
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5. Brookfield Avoids Default on London Skyscraper
According to securities filings released today, Brookfield Asset Management has secured a one-year extension on a loan tied to its London office tower that was due January 20.
The lender agreed to the extension in exchange for a 0.25% fee on the loan amount and a 0.35% increase in interest.
Brookfield acquired the 36-story building in 2016 and invested heavily to expand it. But with the pandemic and rising rates, the building’s valuation has steadily declined.
With today’s low-rate environment gone, many landlords are being forced to refinance at higher costs. If the vacancy rate increases, the property could lose a third of its value, falling to as low as £450 million.
Brookfield is paying the 0.25% fee and higher interest to secure the one-year extension.
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6. Tesla Stock Trails Market Dramatically
三年前的今天，特斯拉（Tesla）正式加入了标普500的名单。
Three years ago today, Tesla officially joined the S&P 500 Index.
On the day before its inclusion, Tesla shares traded at $232. Today, the price is $258, marking an annualized return of just 11%. By comparison, the S&P 500 has returned 28% over the same period, powered by strong performance from Microsoft, Apple, and Nvidia. Tesla, the 7th-largest weight in the index, ranks in the bottom half in terms of performance.
Roth Capital Partners analyst Craig Irwin explained that Tesla’s valuation was already high prior to joining the index, so the stock’s post-inclusion performance has been more of a rollercoaster.
Going forward, Tesla faces a tougher market as EV demand begins to slow.
At its peak, Tesla stock was up 80% from the day before it joined the index. At its lowest, it had been cut in half.
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7. US Bond and Stock Rally Raises Concern
Today, the yield on 10-year US Treasury bonds dropped to levels last seen in July, falling 0.4% for the month. UK 10-year bond yields also rose on easing inflation.
Although several indicators show rising consumer confidence, economists warn that the recent bond and equity rallies may be unsustainable.
FedEx—often seen as a bellwether of economic health—has warned of a possible economic slowdown, with declining profits.
This Thursday and Friday, the US will release GDP and Personal Consumption Expenditures data, offering investors more insight into the macro outlook.
The Nasdaq 100 fell as much as 1.1%, while the S&P 500 pulled back over 1%.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.