—— U.S. Stock Bubble Reemerges, Time to Sell; Manhattan Office Rents Plunge 50%; Disney Closes Star Wars Hotel; Morgan Stanley CEO to Step Down Within a Year; Chinese Buyers Return to Australia Housing Market; Dubai Palm Island Hotel Sold; Netflix’s Ad-Supported Tier Attracts 5 Million Users
1. U.S. Stock Bubble Reemerges, Time to Sell
Bank of America investment strategist Michael Hartnett reiterated that the AI boom may be fueling a mini stock market bubble. He warned that the Federal Reserve hasn’t finished raising interest rates, and rising bond yields could pose bigger risks.
Hartnett, who accurately predicted last year’s market slump, advised investors to sell when the S&P 500 reaches 4,200 to avoid a later downturn.
He noted that if the Fed prematurely pauses rate hikes, U.S. Treasury yields could surpass 4%. On Thursday, the 10-year Treasury yield hit 3.6%.
The Nasdaq 100 Index surged to its highest level since April 2022, with a 26% year-to-date gain. Tech stocks have seen five consecutive weeks of fund inflows.
The Nasdaq has entered “overbought” territory for the first time since February—indicating a possible mini bubble.
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2. Manhattan Office Rents Plunge 50%
This year, New York City’s office vacancy rate has hit a record 22.7%, far exceeding the 11% ceiling seen in prior decades. City budget analysts expect the rate won’t fall below 19% before 2026.
While residential rents in NYC continue to rise and tourism has revived the retail sector, office buildings remain slow to recover.
In April, average rent per square foot for Manhattan office space was $75.13, down 50% year-over-year.
Commercial real estate tax revenues fund essential city services such as education, police, and sanitation—and account for 20% of the city’s total revenue.
The city anticipates revenue may stagnate or decline, while costs continue rising—posing major challenges for the mayor.
A 47-story tower at 60 Wall Street is now entirely vacant, and the owner plans major renovations to attract tenants.
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3. Disney Closes Star Wars Hotel
Disney, which has recently clashed with Florida Governor Ron DeSantis, announced plans to close its Star Wars-themed hotel in Florida by late September and has also canceled its $864 million Florida campus project that would have relocated 2,000 employees.
The hotel offered guests a two-night immersive spaceship experience, starting at $4,800 for two people, with 100 rooms total.
Disney did not confirm whether the two decisions were related to the political conflict, saying only that changing operational conditions were to blame.
Previously, Governor DeSantis signed legislation to take control of the board overseeing Disney World municipal services. Disney argued the law stifles opposition to public school gender policies.
Due to the dispute with the governor, Disney may forgo a $17 billion investment and the creation of 13,000 jobs in Florida.
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4. Morgan Stanley CEO to Step Down Within a Year
James Gorman, who helped rescue Morgan Stanley during the global financial crisis, plans to step down as CEO within the next 12 months and will stay on as Executive Chairman for a time.
Gorman, age 64, has been CEO since 2010. He stated that there are currently three internal candidates for his replacement.
He believes the move will provide a stable foundation for the company’s growth over the next decade.
With investment banking and wealth management as twin engines, Morgan Stanley has become one of the best-performing banks of the past decade.
Following the 2008 crisis, Gorman strategically acquired E*TRADE Financial and Eaton Vance.
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5. Chinese Buyers Return to Australia Housing Market
According to real estate firm Juwai IQI, Chinese inquiries for Australian residential properties rose 127% in Q1 compared to Q4 last year. Agents serving Chinese clients expect inquiry volume to keep climbing throughout 2023.
Daniel Ho, co-founder of Juwai IQI, expects Chinese real estate investment in Australia to rise 30% this year over last year.
Australia’s housing market faces similar issues to the U.S.—soaring rents and tight inventory. Foreign buyers are also helping to drive prices up.
As China–Australia relations improve, Australia is once again becoming a top destination for Chinese property investors.
Chinese buyers are most interested in three- and four-bedroom homes.
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6. Dubai Palm Island Hotel Sold
Sources say that Anantara The Palm Dubai—a well-known luxury resort on Dubai’s iconic artificial island—is close to being sold for $280 million.
The resort is owned by UAE developer Seven Tides, which has hired Grant Thornton to manage the transaction.
Anantara boasts a 1,312-foot private beach and nearly 300 hotel units.
During the pandemic, Dubai was seen as a safe haven and attracted wealthy tourists and expats. In the year ending March, the resort’s occupancy averaged 83%, with an average daily rate of $213.45.
Dubai’s tourism sector has recovered post-COVID, but has yet to surpass 2019 levels.
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7. Netflix’s Ad-Supported Tier Attracts 5 Million Users
Streaming giant Netflix says its $7 ad-supported plan has attracted over 5 million monthly active users within six months of launch.
The ad-tier is about half the price of the standard plan, making it more accessible to cost-conscious users.
However, monthly active users do not necessarily represent individual subscriptions, as many accounts are shared among multiple viewers. As of Q1’s end, Netflix had 233 million paying subscribers globally.
The capital-intensive streaming sector may require price wars to keep growing user bases.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.