—— China Extends Preferential Mortgage Policy; Amazon Increases Layoff Target to 18,000; U.S. Job Growth Exceeds Expectations in December; BBBY Faces Ongoing Losses and Possible Bankruptcy; U.S. Auto Loan Sector Faces Crisis; ‘Avatar 2’ Surges to $1.5 Billion; Hillary Clinton to Teach at Columbia
1. China Extends Preferential Mortgage Policy
According to a statement released today by China’s central bank and regulators, some cities will continue offering discounted mortgage rates to first-time homebuyers—provided that prices of newly built homes have declined for three consecutive months.
China first introduced this preferential policy in September 2022 to support the long-term stability of the property sector.
The statement said city governments should evaluate housing prices every three months starting from December 2022. Only properties with both year-over-year and month-over-month price drops will qualify for discounted rates. For properties with price gains over three consecutive months, governments should offer the national minimum rate.
In December 2022, China’s housing sales continued to fall, with the top 100 developers seeing sales decline by 30.8% year-over-year. Investors believe sustained stimulus and support from the government could reverse the trend.
With backing from the central bank and local governments, China’s housing sales may recover.
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2. Amazon Increases Layoff Target to 18,000
Today, Amazon CEO Andy Jassy said in a letter to employees that the company will cut more than 18,000 jobs—about 1% of its workforce—in what will be the largest layoff in its history.
The layoff plan began late last year, primarily affecting HR, retail, and some corporate roles. Andy stated that the move will help Amazon pursue long-term opportunities and strengthen its cost structure.
As of the end of September, Amazon employed 1.5 million people, including 350,000 corporate workers—far more than other Silicon Valley companies.
In addition, Andy has cut experimental or underperforming businesses, including online medical services and delivery robots.
While layoffs are tough on employees, they are a relatively quick way for Amazon to adjust its cost structure.
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3. U.S. Job Growth Exceeds Expectations in December
According to the latest data from ADP Research Institute and Stanford Digital Economy Lab, U.S. private companies added 235,000 jobs in December, up from 182,000 in November. Most of the gains came from small and mid-sized businesses with no more than 150 employees.
Leisure and hospitality, education, healthcare, and construction led job gains.
Meanwhile, large corporations cut 151,000 jobs—the most since April 2020.
ADP Chief Economist Nela Richardson said that although the job market remains strong, hiring trends are fragmented and vary by industry and company size. Companies that ramped up hiring in early 2022 are now slowing or laying off staff.
The data highlights solid demand in the labor market but also indicates persistent wage inflation pressure.
Another report showed that U.S. jobless claims fell to the lowest level since September.
Initial and continuing jobless claims both declined, indicating continued labor market strength.
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4. BBBY Faces Ongoing Losses and Possible Bankruptcy
Home goods retailer Bed Bath & Beyond (BBBY) warned today that it may soon file for bankruptcy due to its inability to cover operating costs.
In a filing released today, the company disclosed that it had negative cash flow for the nine months ending November 26.
BBBY said it is evaluating several options, including asset sales, restructuring its capital structure, or seeking bankruptcy protection.
In recent months, many suppliers halted shipments to BBBY amid concerns about the company’s viability. Years of poor management and corporate culture have left it unable to compete with e-commerce giants like Amazon.
BBBY shares plunged 21% today following the announcement.
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5. U.S. Auto Loan Sector Faces Crisis
According to data from Edmunds.com, in Q4 last year, 16% of U.S. consumers had monthly car loan payments exceeding $1,000—up from 10.5% a year earlier and 6.7% in Q4 2020.
Used car prices have declined in recent months. Banks warn that a wave of auto loan defaults or delinquencies may be coming. If loan balances exceed the car’s value, many vehicles could be repossessed.
The average new car loan has nearly reached $50,000, and in Q3, total U.S. auto loans hit $1.52 trillion, up from $1.44 trillion a year prior. The average APR for new car loans in Q4 was 6.5%, up from 5.7% the previous quarter.
Typically, it’s considered healthy for car payments to account for 4% to 6% of monthly income.
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6. ‘Avatar 2’ Surges to $1.5 Billion
According to data released today by Disney, Avatar: The Way of Water, directed by James Cameron, has earned $1.52 billion worldwide—surpassing Top Gun: Maverick ($1.49 billion) to become the highest-grossing film since 2022.
Top Gun: Maverick was not released in China, and less than 50% of its gross came from international markets. In contrast, Avatar 2 earned 69% of its revenue overseas, including $169 million from China.
In 2019, Disney acquired 20th Century Fox for $71 billion, including the rights to Avatar.
The first Avatar film grossed $2.9 billion globally and remains the highest-grossing movie of all time.
After just two weeks in theaters, Avatar 2 has become the top-grossing film since 2022.
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7. Hillary Clinton to Teach at Columbia
Today, Columbia University President Lee Bollinger announced that former U.S. Secretary of State Hillary Clinton will join the faculty this fall to teach global politics.
Lee stated that Hillary’s talents and rich experience would significantly contribute to the university’s research and teaching.
The 75-year-old Clinton will also partner with Columbia School of International and Public Affairs Dean Keren Yarhi-Milo to create a new program supporting women in politics.
Hillary said that Columbia is committed to education and developing the next generation of political leaders.
Hillary, the 2016 Democratic presidential nominee, will begin teaching in the 2023 academic year.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.