—— NYC Property Investment Transactions Drop 31%; US Earnings Season Faces Valuation Challenge; China Grants Loan Extensions to Developers; US Used-Car Prices See Record Decline; Fewer Active Video Gamers in the US; Cava Stock Gets Unanimous Analyst Praise; Rivian Shares Surge 48% in One Day
1. NYC Property Investment Transactions Drop 31%
Ariel Property Advisors’ latest report shows that in the first half of this year, there were 1,046 property investment transactions in New York, a 31% decline from the same period last year, mainly due to weakness in multifamily and office properties.
Year-to-date, the five boroughs of New York only saw $12.8 billion worth of properties change hands, down 12% compared to the previous six months.
Ariel’s data indicates that multifamily and office property sales are the largest drag on the market. Industrial, development land, and other non-office commercial properties have been relatively stable.
Ariel President Shimon Shkury believes that transaction volumes may rise later this year and early next year, as undeployed capital and maturing loans build up in the market.
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2. US Earnings Season Faces Valuation Challenge
Morgan Stanley strategist Michael Wilson wrote today that compared to other global markets, US stock valuations have risen sharply this year, and sustaining current valuation levels would require companies to deliver earnings far exceeding expectations.
Wilson said with companies set to start reporting second-quarter results this week, unless firms significantly raise revenue guidance, the stock rally will be hard to maintain.
Deutsche Bank strategist Binky Chadha also warned that given already high valuations, even excellent earnings may not drive much upside.
Several bank strategists believe second-quarter earnings might not justify current lofty stock valuations.
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3. China Grants Loan Extensions to Developers
Today, the People’s Bank of China (PBOC) and the National Financial Regulatory Administration (NFRA) jointly announced that developer loans due before 2024 will receive a one-year repayment extension, and the PBOC encouraged banks to assist developers in completing projects.
The statement also said that project-based special loans maturing before 2024 would not be classified as high risk.
Bloomberg credit analysts noted that China’s property sector has lost its traditional investment appeal, and restoring investor confidence and sales will be challenging.
Developers will get a one-year extension mainly to ensure housing project completion.
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4. US Used-Car Prices See Record Decline
According to Manheim’s used-vehicle value index, US used-car prices dropped 4.2% from May to June and fell 10.3% year-over-year — the largest drop on record.
Chris Frey, Senior Manager of Economic and Industry Insights at Cox Automotive, noted that auction buyer numbers have fallen, and though retail inventories are improving, wholesale price volatility should ease by year-end.
Uncertain economic conditions are making consumers more cautious about major purchases.
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5. Fewer Active Video Gamers in the US
Today, the Entertainment Software Association released its annual industry report, showing that 72% of all gamers last year were white, mainly due to demographic proportions, but minority representation among gamers is steadily increasing.
In recent years, the US gaming industry has been criticized for focusing too heavily on white-centric narratives. More publishers are now introducing non-white characters.
Activision Blizzard and other major game companies have also actively hired minority employees — minorities made up 39% of staff in 2022.
The report shows active US gamers dipped slightly to 213 million, with the 18–44 age group being the largest, and Hispanic and Black Americans being the most avid gamers.
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6. Cava Stock Gets Unanimous Analyst Praise
Last month, restaurant chain Cava Group’s stock surged post-IPO, and analysts believe there’s still room to run, with some saying Cava could become the next investor darling after Chipotle Mexican Grill.
Today, Cava shares jumped another 10%, and Bloomberg data shows all analysts have target prices above Friday’s closing price.
This year, Chipotle’s shares have surged 50% and hit a record high on June 30. Given Cava’s similar fast-casual model, analysts are optimistic about its future.
Since its IPO last month, Cava’s stock has nearly doubled, and analysts see it as a potential “next Chipotle.”
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7. Rivian Shares Surge 48% in One Day
Today, electric truck and SUV maker Rivian’s stock skyrocketed 48% after the company reported better-than-expected quarterly production and deliveries of hundreds of vehicles to Amazon.
In the last quarter, Tesla’s production was 34 times Rivian’s, so Rivian and its 40-year-old founder RJ Scaringe still have a long road ahead.
RJ stated that operational experience and supply chain confidence have improved significantly, with much better control compared to the company’s early days.
Rivian’s founder believes operations are turning a corner, and supply chain improvements are steadily progressing.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.