Buying a rental property in America is no longer profitable.
Because the current mortgage rate (6.1%) is significantly higher than the profit/cap rate (4.4%) of rentals. This means that any investor who uses debt to finance their purchase is likely losing money on cash flow from Day 1. Note how from 2012-2022, the opposite was true. Cap Rates were higher than mortgage interest. Which is why so many people piled into single-family rentals. This is no longer the case... Will the Fed jumbo rate cut start to fix this? Source: Nick Gerli, re:venture
AMERICANS CURRENT VALUE OF STOCK MARKET INVESTMENTS IS SKYROCKETING
The median amount of US consumers' stock market investments hit $237,000. The value has DOUBLED in 1 year. Such a spike has never been seen before. Source: Global Markets Investor
😱 The "shocking chart" of the day !!! 😱 US CPI index since the 1970's vs its trend line.
In order to 'average' out the recent period of high inflation at 2%, the fed would have to tolerate a period of time of deflation. But can they really afford deflation with $33T of debt and persistently high budget deficit? As mentioned by Peter Boockvar on X, once purchasing power is lost, it is lost forever because central bankers won't let you get it back... Last week, Federal Reserve Governor Chris Waller inadvertently made that perfectly clear when he spoke on Friday. He told CNBC in an interview that "What's got me a little more concerned is inflation is running softer than I thought."... Bottom-line: It is very unlikely that inflation will come back to trend line in the foreseeable future. Perhaps the jumbo rate cut was also about making sure that the US economy doesn't fall into a deflationary trap... Welcome to the era of fiscal dominance Source chart: Bloomberg
Prosus : Will It Be Able to Breakout This Time?
Prosus (PRX NA) has reached the major resistance zone between 35-37 for the 7th time since July 2021. Will it be able to breakout this time? Keep an eye out! Source: Bloomberg
🚨US UNEMPLOYMENT RATE USUALLY RISES BEFORE THE S&P 500 CORRECTION🚨
US jobless rate rose from 3.4% in April 2023 to 4.2% in August near the highest in 3 years. In the past, when the unemployment rate was rising, the S&P 500 index saw significant declines. The us jobs reports in the coming weeks will be key... Source. Global Markets Investor
Don't stop. Keep going.
Source: Markets & Mayhem
Contrarian Investment
Source: The Investing for Beginners Podcast @IFB_podcast
Money Market Funds saw a weekly outflow of $20 billion, the largest weekly outflow since June
Source: Barchart, Bloomberg
