— U.S. to Issue $100B in Long-Term Treasuries; 5% Mortgage Rate a Key Tipping Point; Eurozone Inflation Slows, Economy Grows; Birkenstock Plans September IPO; AT&T to Cut Thousands of Jobs; Country Garden Chair Donates 55% of Stake; YouTube Star Sues Food Partner
1. U.S. to Issue $100B in Long-Term Treasuries
This week, the U.S. will hold its first quarterly long-term Treasury auction since early 2021. Traders estimate issuance could reach $102 billion, exceeding pre-pandemic levels.
Traders will also closely watch the Treasury’s early buyback plans.
Data shows large bond issuance may not directly lower bond prices.
However, heavy issuance could trigger short-term volatility—many banks have recently cut back on bond purchases, and bidders at last Thursday’s auction demanded steeper discounts.
Over the past two decades, U.S. debt has surged, but yields have remained historically low.
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2. 5% Mortgage Rate a Key Tipping Point
According to a recent Zillow survey, 38% of homeowners with mortgage rates over 5% are willing to sell their homes, compared to just 21% of those with rates below 5%.
Since early 2022, existing home sales have declined monthly. With supply tight in the resale market, many buyers are turning to new construction.
The report shows 80% of U.S. mortgages carry rates under 5%, and 90% are under 6%.
Zillow senior economist Orphe Divounguy says mortgage rates are unlikely to fall below 5% anytime soon.
Mortgages below 3% now account for less than one-third of the market.
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3. Eurozone Inflation Slows, Economy Grows
According to Eurostat, inflation in the Eurozone dropped to 5.3% in July, while core inflation (excluding energy and food) held steady at 5.5%.
Another Eurostat report showed the Eurozone economy grew 0.3% quarter-over-quarter in Q2, despite a year of interest rate hikes by the European Central Bank (ECB).
Service-sector inflation rose to a record 5.6%, a top concern for policymakers.
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4. Birkenstock Plans September IPO
Sources say iconic German footwear brand Birkenstock is planning an IPO this September, with a valuation possibly reaching $10 billion.
Parent company L Catterton, backed by LVMH, is working with Goldman Sachs and JPMorgan on the listing.
A scene in the new Barbie movie featuring pink Birkenstocks gave the brand a visibility boost.
Last year, revenue rose 29% to $1.3 billion, and the company invested heavily in German manufacturing.
Founded 250 years ago, Birkenstock entered the U.S. market in 1966.
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5. AT&T to Cut Thousands of Jobs
Last week, AT&T CEO John Stankey emailed staff announcing that Chief People Officer Angela Santone will step down at the end of September.
Santone is one of only three female executives at AT&T and joined the company from Time Warner in late 2019.
AT&T has faced slowing growth in wireless subscriptions and a $6 billion increase in debt to $143.3 billion. The company raised mobile plan prices and plans to reduce its U.S. offices from 350 to just nine major hubs.
AT&T aims to cut $8 billion in costs, including thousands of job cuts.
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6. Country Garden Chair Donates 55% of Stake
According to a Sunday statement, Country Garden Services Chairwoman Yang Huiyan will transfer 55% of her personal holdings—worth roughly $826 million—to the Guoqiang Public Welfare Foundation.
Yang, China’s third-richest woman with an estimated $7 billion net worth, will retain voting rights to ensure board stability.
The foundation has pledged to hold the shares for at least 10 years.
The donation comes from her stake in Country Garden’s property management unit.
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7. YouTube Star Sues Food Partner
James Donaldson, aka MrBeast, who has 170 million YouTube subscribers, has filed a lawsuit to terminate his business partnership with Virtual Dining Concepts over poor product quality.
In 2020, MrBeast and Virtual Dining launched a burger and fries chain across the U.S., with orders placed online through the MrBeastBurger site.
Thanks to MrBeast’s massive reach, the restaurant sold 1 million burgers in its first 3 months.
But soon after, fans complained about declining food quality. MrBeast says his complaints to the company were ignored.
The lawsuit claims Virtual Dining sacrificed quality for rapid expansion, used MrBeast’s image without consent, and failed to pay his company any profits.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.