1. Global Housing Market May Enter “Ice Age”
2. S&P 500 Could Break 5,000 Next Year
3. China to Fund 50 Real Estate Developers
4. Dubai Taxi IPO Sees Huge Demand
5. Blackstone Consortium Bids to Buy Adevinta
6. Morgan Stanley President Diagnosed With Cancer
7. Binance Pleads Guilty, Agrees to $4 Billion Fine
1. Global Housing Market May Enter “Ice Age”
Mark Zandi, Chief Economist at Moody’s Analytics, says the golden era of buying single-family homes may be over. Homeowners who bought before the financial crisis may have built up equity, but the housing outlook for the next 10 years appears bleak.
Zandi forecasts 30-year mortgage rates will hover around 5.5% for the next decade — a far cry from the 2.65% seen in early 2021. Other developed nations are expected to experience similar trends.
According to Intercontinental Exchange, US housing affordability is now at its worst level in over 40 years. Households need to spend 40% of median income to afford an average home.
Goldman Sachs economists warn the full impact of high mortgage rates will be felt more in 2024. Wharton professor Benjamin Keys says the housing market is likely in the early stages of an “ice age,” with no thaw in sight.
Mortgage costs have more than doubled in many regions around the world.
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2. S&P 500 Could Break 5,000 Next Year
Bank of America strategist Savita Subramanian’s team believes US companies have largely adapted to high interest rates and macro uncertainty, and forecasts the S&P 500 could surpass 5,000 points in 2024.
Subramanian notes that markets have already priced in geopolitical risks and that rate hikes have had their intended effect. She says equity investors might even be able to “blindly pick” stocks and still profit.
Analysts at Goldman Sachs, Société Générale, and Barclays share similar views. Even Morgan Stanley’s historically bearish strategist Michael Wilson has become more optimistic.
Corporate earnings through Q3 have shown resilience, suggesting businesses are adjusting well to the tough macro environment.
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3. China to Fund 50 Real Estate Developers
The Chinese government is drafting a “whitelist” of 50 real estate firms to receive financial support, sending Bloomberg’s index of Chinese property developers up 7.6%.
Sunac China, which recently completed a debt restructuring, surged 27%.
Sources say Vanke, Longfor, and Seazen are on the list, while others remain unconfirmed.
In Q3, China’s real estate sector shrank 2.7%, and home prices posted their steepest drop in eight years.
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4. Dubai Taxi IPO Sees Huge Demand
Dubai Taxi’s IPO was fully subscribed within one hour of opening. The offering could raise 1.16 billion dirhams ($315 million), reflecting strong market demand.
The Dubai government sold 25% of the company, giving it a valuation of 4.62 billion dirhams.
In 2022, Dubai raised $8.3 billion by listing four state-owned enterprises. Dubai Taxi’s IPO is the first in the past 12 months.
Dubai Taxi operates the city’s largest fleet, with a 44% market share.
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5. Blackstone Consortium Bids to Buy Adevinta
A private equity group including Permira and Blackstone has made a takeover offer for Adevinta, a digital classifieds platform backed by eBay.
The deal could value Adevinta at $13 billion, making it one of the year’s largest leveraged buyouts (LBOs).
Operating in 14 countries, Adevinta’s platforms help match buyers and sellers in real estate, autos, and consumer goods.
Despite market headwinds, including high borrowing costs and Middle East turmoil, the deal could proceed.
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6. Morgan Stanley President Diagnosed With Cancer
Andy Saperstein, widely seen as the top contender to be Morgan Stanley’s next CEO, informed colleagues that he has been diagnosed with cancer.
The 56-year-old president said he received the shocking news last week but remains confident and ready to begin treatment.
Although he won’t be traveling during treatment, he will continue working with the firm to ensure smooth operations.
Saperstein oversees Morgan Stanley’s wealth management unit, a key revenue driver in recent years.
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7. Binance Pleads Guilty, Agrees to $4 Billion Fine
Today in Seattle, cryptocurrency exchange Binance and CEO Changpeng Zhao (CZ) pleaded guilty to violating anti-money laundering and US sanctions laws, and to enabling Hamas and other terrorist organizations to use its platform.
Binance will pay over $4 billion in fines, while CZ personally agreed to pay $50 million and step down as CEO. The company will be allowed to continue operating after this settlement.
The US Treasury and Commodity Futures Trading Commission (CFTC) also concluded their multi-year investigations into Binance today.
Authorities found that Binance allowed at least 1.1 million crypto transactions linked to terrorist organizations.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.