—— The price of lumber futures halved as the housing market cooled; Vale established a $100 million venture capital arm; Mobil stock hit a record high; U.S. gasoline prices hit record highs for two consecutive months; CEOs of the two major EV companies were paid $400 million each; Atlanta Airport issued $535 million in bonds.
1. Housing market cooling lumber futures prices halved
According to statistics collected by “Bloomberg”, the futures price of lumber today fell below $568.4 per 1,000 board feet. The cumulative decline this year has reached 50% and reached the cheapest price since September last year. The halving in lumber prices reflects the huge negative impact of rising interest rates on housing sales and development.
During the “building boom” in 2021, the price of lumber has repeatedly hit all-time highs. According to statistics from the mortgage data company Black Knight, since the outbreak of the epidemic, the overall price of U.S. housing has risen by 42%. With the increase in mortgage interest rates, housing affordability has become increasingly poor.
However, for home buyers, falling lumber prices mean that construction costs are expected to decrease, and housing supply and prices may recover.
Falling raw material costs are good news for developers and hopefully, this trend will encourage developers to build more housing
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2. Vale establishes a $100 m VC department
Vale SA, the world’s second-largest mining company and the world’s largest nickel supplier, has recently established its in-house venture capital arm, Vale Ventures, to invest in startups that can bring disruptive innovations to the mining industry.
Initially, Vale Ventures secured a $100 million investment budget to invest in early-stage funding rounds for sustainable mining startups around the world, with the goal of taking 3% to 5% of the companies.
The VC division can start reaping financial and strategic returns in five years, department head Viktor Moszkowicz said in an interview. He revealed that in September last year, the division invested $6 million in its first target company, Boston Metal, which focuses on steel decarbonization.
Vale Ventures’ 4 major investment directions are – zero pollution mining, decarbonization, mining operation technology, and energy transfer metals.
Energy-conducting metals can help reduce fossil fuel use and reduce pollution
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3. Mobil shares hit a record high
The city of Atlanta plans to issue $535 million in debt to renovate Hartsfield-Jackson Atlanta International Airport, the world’s busiest airport.
The municipal bond market has seen calmer issuance activity this week, which could be a good thing for municipalities, and prices could be better when demand is low.
Today, the bond will be officially priced. The Atlanta government will use the funds to build a new taxiway, renovate the terminal, improve security and upgrade other infrastructure at the airport.
So far this year, 13 major airports have issued bonds, most of which are in short supply.
Airport consultancy LeighFisher Inc. expects Atlanta airport to handle 45.5 million passengers in fiscal 2022, 83 percent of its 2019 peak.
Mobil shares hit record high today, benefiting from surging crude oil prices
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4. U.S. gasoline prices hit a record high
According to the latest data released by the U.S. Energy Information Administration, U.S. gasoline demand recently reached 9.2 million barrels per day, the highest level since December last year, but still 1% lower than a year ago and 2019 6% less than in the same period last year.
Summer is the peak driving season for Americans, and since mid-April, oil prices have hit record highs almost every day, and the national average is now infinitely close to $5 a gallon.
Demand and prices for gasoline are currently in line with agency expectations, said Matthew French, an analyst with the Information Agency. Affected by the recent rise in oil prices and slowing non-farm payroll growth, the Information Agency had slightly revised energy demand.
Gasoline prices have even reached $8 a gallon in some US areas, seriously increasing the cost of traveling for Americans
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5. US Mortgage applications hit a 22-year low
According to the latest statistics from the Mortgage Bankers Association, an index tracking the number of mortgage loan applications fell 6.5% in the week ended June 3, the decline continued for four weeks and reached the lowest level in the past 22 years. level, the housing market that has been hot for 2 years has begun to cool down.
The data also showed that refinancing and home buying activity also fell by 6 percent and 7 percent, respectively.
Existing-home sales in the U.S. slowed to their slowest pace since the pandemic in April, though a sparse inventory kept prices climbing.
Americans had to pay 38.6 percent of their income to pay for a median-priced home in March, the largest ratio since August 2007, according to the Federal Reserve’s Atlanta branch.
Housing costs already account for nearly 40% of American wages
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6. EV CEOs got $400 million in compensation
Last year, the CEOs of two emerging trolley companies, Rivian Automotive and Lucid Group, each received combined compensation of more than $400 million.
According to statistics, Lucid CEO Peter Rawlinson (Peter Rawlinson) received $566 million in total compensation, most of which came from stock. Rivian’s CEO, RJ Scaringe, was paid $422 million.
Of course, if a company’s stock price doesn’t go as far as it should, then the salary on the books will shrink, and incentive stock options may become worthless.
Peter has now received the full equity incentive, while RJ will need to wait until early 20207 to receive the full equity.
According to statistics, the total remuneration of the two CEOs is about 14 times that of the CEOs of Ford Motor and General Motors, which shows the expectations of the company and investors for the future development of trams.
The compensation is composed as follows, the vast majority of Peter’s compensation is linked to the company’s strategic development and performance
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7. Atlanta Airport issues $535 million bond
The city of Atlanta plans to issue $535 million in debt to renovate Hartsfield-Jackson Atlanta International Airport, the world’s busiest airport.
The municipal bond market has seen calmer issuance activity this week, which could be a good thing for municipalities, and prices could be better when demand is low.
Today, the bond will be officially priced. The Atlanta government will use the funds to build a new taxiway, renovate the terminal, improve security and upgrade other infrastructure at the airport.
So far this year, 13 major airports have issued bonds, most of which are in short supply.
Airport consultancy LeighFisher Inc. expects Atlanta airport to handle 45.5 million passengers in fiscal 2022, 83 percent of its 2019 peak.
Tourism and bond markets have both recovered well recently, making it a good time for airports to issue bonds
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.