—— U.S. Jobless Claims Exceed Expectations; Biden Proposes New Tax Plan; Manhattan Rents Remain Resilient; CATL Nearly Doubles Net Profit; Goldman Sells Single-Family Rental Portfolio; Rockrose Secures Nearly $100M Refinance; ARK Fund Investors Lose $10 Billion
1. U.S. Jobless Claims Exceed Expectations
The U.S. Department of Labor released new data today showing that for the week ending March 4, initial jobless claims rose by 21,000 to 211,000, exceeding economists’ median forecast of 195,000.
Unadjusted figures showed a rise of 35,000 to 237,000 initial claims, with California and New York accounting for three-quarters of the increase.
Continuing claims also surged by 69,000 to 1.72 million, marking the largest increase since November 2021.
Although jobless claims increased, other data this week showed that private sector hiring demand remains strong. This Friday, the government will release broader labor market data, which could influence whether the Federal Reserve opts for a larger rate hike.
For a Fed struggling to contain inflation, a higher number of jobless claims is ironically seen as positive.
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2. Biden Proposes New Tax Plan
Today, President Joe Biden is set to unveil his budget proposal to Congress. According to sources, Biden is proposing a minimum 25% tax on billionaires, raising the capital gains tax rate from 20% to 39.6%, and increasing income taxes on corporations and wealthy individuals.
However, with Republicans controlling the House, the proposal is unlikely to pass. A similar tax plan failed even when Democrats held both the House and Senate, resulting in a scaled-down version targeting energy and healthcare—the 2022 Inflation Reduction Act.
Administration officials said Biden aims to reduce the federal deficit by $3 trillion over the next decade by boosting government revenue.
Progressive lawmakers have long advocated for higher taxes on the wealthy and corporations, and polling shows broad public support for such measures.
Biden plans to gradually roll back the corporate tax breaks implemented during the Trump administration.
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3. Manhattan Rents Remain Resilient
According to a joint report by appraisal firm Miller Samuel and brokerage Douglas Elliman, the median monthly rent for newly signed leases in Manhattan was $4,095 in February—down just $2 from January.
Since reaching $4,150 in July 2022, median rents have remained elevated.
February saw 1,200 more new leases signed than the same month last year, and 1,400 more available listings at month-end. The data indicates that more tenants are rejecting renewal offers with rent hikes and instead searching for new apartments.
Gary Malin, COO of Corcoran Group, said many tenants are shocked by renewal prices, especially since rents were unusually low during the pandemic.
Despite a relatively high vacancy rate in rental buildings, landlords are not rushing to offer discounts but are waiting for the busier spring and summer leasing seasons.
While rents typically decline in Q1, Manhattan prices have remained virtually unchanged this year.
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4. CATL Nearly Doubles Net Profit
Today, Tesla battery supplier Contemporary Amperex Technology Co. Limited (CATL) reported its latest earnings. For the quarter ending December 31, the company posted $4.4 billion in net profit, up 92.9% year-over-year.
Revenue reached ¥328.6 billion, up 152% year-over-year and close to analyst forecasts. Core battery sales achieved a 17.2% profit margin, and the fast-growing energy storage segment generated ¥45 billion in revenue, surpassing expectations.
In 2022, CATL held a 37% share of the electric vehicle battery market, driven by its cost-effective lithium-iron-phosphate (LFP) batteries. South Korea’s LG and China’s BYD tied for second place in market share.
CATL’s battery production capacity and market dominance significantly exceed that of its competitors.
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5. Goldman Sells Single-Family Rental Portfolio
According to an email statement from Goldman Sachs Asset Management, the firm has sold 15 properties in Manchester and Liverpool to PGIM Real Estate for £190 million. Goldman had acquired the portfolio for £150 million in 2020.
While the UK single-family rental market has long been dominated by private investors, a housing shortage has led institutional investors to seek stable returns in this sector.
PGIM’s head of investment Charles Crowe stated that despite challenging market conditions, the firm remains optimistic about single-family rentals, which provide both high-quality housing and sustainable returns for investors.
The portfolio includes 918 single-family homes spread across Manchester, Liverpool, and surrounding areas.
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6. Rockrose Secures Nearly $100M Refinance
According to property records made public on Tuesday, developer Rockrose Development has secured a $97.7 million refinancing loan from Wells Fargo for its 42-story luxury rental tower Tribeca Pointe in Manhattan’s Battery Park City.
Built in 1999, Tribeca Pointe houses 340 apartments, including 70 affordable units. Last year, Rockrose reached an agreement with local regulators to preserve those affordable units until 2069, making them available to families earning less than 50% of the area median income.
Designed by Gruzen Samton Steinglass, the property features a rooftop observatory, gym, children’s playroom, laundry facilities, and 24-hour doorman service.
According to Rockrose’s website, monthly rents for studios and two-bedroom units at Tribeca Pointe are $4,542 and $8,388, respectively.
Rockrose is known for developing high-end rental properties in Manhattan and Long Island City and has a strong industry reputation.
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7. ARK Fund Investors Lose $10 Billion
Despite the collapse in tech valuations over the past two years, star investor Cathie Wood’s Ark Investment Management continues to attract capital.
Since its inception nine years ago, ARK has generated over $300 million in management fees. Ironically, it has lost $10 billion in investor capital.
According to FactSet, 70% of ARK’s total fees were collected before February 2021. After that, ARK’s portfolio value plunged by nearly 75%.
In the two weeks leading up to February 2021, ARK received $3 billion in inflows, reaching a peak AUM of $27.9 billion. As rising interest rates triggered a broad stock market decline, ARK’s AUM has since fallen to $7.6 billion.
Since the beginning of 2023, ARK’s value has rebounded somewhat, and the firm now earns an average of $230,000 in daily fees.
FactSet’s head of global fund research Elisabeth Kashner noted that while ARK’s fees have enriched Cathie Wood, the same cannot be said for her investors.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.