Morning Brew - ☕ Goin' down

The housing boom may be over...
September 23, 2022 View Online | Sign Up | Shop

Morning Brew

Vuori

Good morning. This week the sun began to set before 7pm in New York. The next time we’ll get a post-7pm sunset? March 2023—basically half a year from now. But it could be worse, and it will be in December.

Neal Freyman, Max Knoblauch, Matty Merritt

MARKETS

Nasdaq

11,066.81

S&P

3,757.99

Dow

30,076.68

10-Year

3.715%

Bitcoin

$19,190.58

Starbucks

$84.70

*Stock data as of market close, cryptocurrency data as of 11:00pm ET. Here's what these numbers mean.

  • Markets: Stocks are having a worse week than Adam Levine, falling for the third consecutive day against the backdrop of massive rate hikes all over the globe. Companies that cater to consumers, like Starbucks, were hit especially hard.

Markets Sponsored by Fidelity Investments

Passive income is as appealing to investors as pizza is to New York City rats. In the latest episode of Fresh Invest, our investing podcast sponsored by Fidelity Investments, we break down how you can start earning passive income + what to do with this dough once you have it. Listen here.

HOUSING

Autumn comes for the housing market

Image of houses JamesBrey/Getty Images

The days of offering up the naming rights to your firstborn child while paying $100k over asking price on a home appear to be over.

After a hockey stick-shaped rise during the pandemic, the housing market is showing clear signs of slowing down as the Fed’s interest rate hikes ripple across the sector. A few fresh data points from the week:

  • The median rental price in the US fell last month for the first time since November 2021, according to Realtor.com. Even in Manhattan, where every first-year analyst is looking for a spot in August, rents plateaued.
  • Sales of existing homes fell in August for the seventh straight month, according to Zillow. That’s the longest stretch of decreasing sales since 2007.

What gives?

Both buyers and sellers are “trapped in place,” Bloomberg writes.

Buyers are getting spooked by the highest mortgage rates since 2008 (6.29%), which have risen alongside the Fed’s benchmark interest rate. With mortgage rates nearly doubling since the start of this year alone, homebuyers would be forking over hundreds of dollars more in monthly payments than they were this time last year on the same-priced house.

Sellers are also thinking twice about putting out a “For Sale” sign. Because many of them got locked into low mortgage rates when interest rates were near zero, there’s little reason for them to give that up, only to pay more each month for a new place. As of the end of July, almost 90% of first-lien mortgages had a sub-5% interest rate, and two-thirds were less than 4%, per Black Knight. That contributed to a steep drop in newly listed homes this summer.

Bottom line: For Fed Chair Jerome Powell, who’s desperately trying to tamp down inflation, this is progress. “Housing prices were going up at an unsustainably fast level,” he said this week, which threw supply and demand out of whack. Powell said balance could only be brought to the housing universe when the market goes through a “correction.”

For more…here are the housing markets that are cooling fastest in the US. Seattle is No. 1.—NF

        

TOGETHER WITH VUORI

Bring on ~cozy szn~

Vuori

Now that we’re officially (and shamelessly) enjoying PSLs, solidifying apple-picking plans, and brainstorming Halloween costumes, it’s time to adjust our wardrobes to match that crisp feeling in the air.

Whether your plans include leaf-peepin’ hikes, late-night bonfires, or staying warm on the way home from a sweaty workout class, Vuori’s relaxed-fit Cozy Sherpa Jacket is the perfect addition to your fall wardrobe.

Made from ultra-plush sherpa, this stylish jacket comes in three goes-with-anything neutrals. And with a hidden full-zip snap closure and convenient zippered pockets, it’s the ideal jacket for effortlessly stylish layering—no matter where your fall activities take you.

Take 20% off your first purchase here.

        

WORLD

Tour de headlines

Bank CEOs testifying before Congress Alex Wong/Getty Images

Bank execs get an earful from Congress. On their second day of testimony on Capitol Hill, the CEOs of the biggest US banks were grilled by lawmakers. Republicans accused them of advocating for socially liberal causes, and Democrats raised concerns about the payment service Zelle, which has been the subject of widespread fraud complaints. On the state of the economy, the bank leaders all sounded a similar note: Consumers are in good shape, but the Fed’s interest rate hikes will definitely slow down the economy and could lead to a recession.

Russia is on edge following Putin’s conscription order. Yesterday, Russia began implementing its new plan to summon up to 300,000 reservists to fight in the Ukraine war, and the backlash intensified as the conscription papers were handed out. At least 1,400 people have been arrested in anti-war protests across the country, and lines formed at the Russian borders with Georgia, Mongolia, and Kazakhstan. The Kremlin said reports of people fleeing the country to avoid being drafted were exaggerated.

CNN cancels interview over hijab demand. CNN’s Chief International Anchor Christiane Amanpour said she canceled an interview with Iranian President Ebrahim Raisi in NYC after she refused to wear a hijab (“We are in New York, where there is no law or tradition regarding headscarves,” Amanpour said). The interview was set to take place amid ongoing protests in Iran over Mahsa Amini, a 22-year-old woman who died days after she was arrested by the country’s morality police.

SPORTS

Quit your job, catch an Aaron Judge home run, retire

Aaron Judge smackin one outta the park. John Fisher/Getty Images

With his 60th dinger of the season on Tuesday night, Yankees slugger Aaron Judge is on pace to break the long-standing American League home run record in the next few games. And if you happen to catch one of those home runs, you could be on pace to finally afford a house.

Given Judge’s lack of performance-enhancing drug controversy and his popularity among baseball fans, experts are estimating his 61st home run ball could fetch anywhere from $250,000 to more than $2 million at auction. His 62nd (and record-breaking) bomb/homer/moon shot has an estimated value of between $500,000 and $5+ million.

  • For that reason, Yankees ticket prices have ballooned to $960 on StubHub, with some eclipsing $4,000 on the secondary market.

With all that money on the line, the MLB isn’t taking any chances on a forgery. For the rest of the season, every ball pitched to Judge will include a covert marking that can only be seen with certain technology, although the league isn’t being much more specific than that to ensure the legitimacy of its authentication process.

When could it happen? The 6'7" Judge is averaging one home run every ~2.5 games. He has 13 games left and needs just two more taters to break Roger Maris’s 1961 record.—MK

        

WORK

New workplace buzzword just dropped: ‘productivity paranoia’

Illustration  of camera lense in front of computer screen, eyeball, and keyboard Photo Illustration: Dianna “Mick” McDougall, Sources: Getty Images

And your boss who lives on the other side of the country might have it.

In a survey released by Microsoft yesterday, only 12% of business leaders said they are fully confident that their hybrid employees are productive at work, compared to 87% of employees who say they are productive. That disconnect, which Microsoft CEO Satya Nadella called “productivity paranoia,” can result in intense virtual tracking, which had typically existed for lower-wage roles like those in grocery stores or fast-food restaurants, seeping into the world of desk jobs.

In 2020, Microsoft caught flak for an invasive productivity tracker it added to Microsoft 365. It removed the tool and now says it’s against employee surveillance and tracking tech.

Big picture: Execs and employees are as aligned on remote work as your spinal column after camping. The survey also found that while 82% of corporate higher-ups say a big concern this year is bringing employees back to the office, 73% of employees say they need a better reason than “we want you back” from management to brave the shared fridge and a commute.—MM

        

TOGETHER WITH APOLLO NEURO

Apollo Neuro

A solution for better sleep: Apollo™ is a new kind of wearable that uses proven touch therapy to build resilience to stress and help you sleep better. It helps you spend 19% more time in deep sleep and experience up to 25% increases in focus + concentration when awake. Get $40 off your purchase here.

        

GRAB BAG

Key performance indicators

Football, bowl of pretzels, and cooler full of ice, but no beer. Credit: Illustration: Will Varner, Photos: Getty Images

Stat: Notice anything different about Amazon’s Thursday Night Football telecast last night? There were zero beer commercials. Unlike TV networks, Amazon bans ads that promote alcohol in several countries, including the US. But an NFL telecast without beer ads is like a wedding reception without “Shout.” Of the $60 million that beer companies spent on TV ads in the past two weeks, 70% was directed to NFL programming. Related: Amazon’s first TNF telecast was a big hit.

Quote: “Literally had a mom walk in [and] ask ‘Did they behave?’ after leaving her kids here.”

GameStop employees are fed up with parents dropping off their kids at their stores before shopping elsewhere, and they’re venting their frustrations about it on the GameStop subreddit. “Your kids are not our problem. We already have enough to deal with,” one employee told the website Kotaku. The phenomenon, which has been around for years, of course has a name: “GameStop Daycare.”

Read: The super-thin skimming devices used to steal PIN numbers at ATMs. (Krebs on Security)

QUIZ

Quiz me like you do

Weekly news quiz

The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to skipping the first airport Starbucks because of the line and finding a Starbucks deeper in the airport with no line.

It’s that satisfying. Ace the quiz.

WHAT ELSE IS BREWING

  • Boeing will pay $200 million to settle SEC charges that it misled investors following two fatal crashes of the 737 Max.
  • The Boston Celtics suspended head coach Ime Udoka for one year over a reported relationship with a Celtics staff member.
  • A judge temporarily blocked Indiana’s abortion ban from being enforced—just one week after it went into effect.
  • Tesla is recalling almost 1.1 million vehicles to fix a window reversal system that could pinch your fingers.
  • Neptune’s rings look splendid in new photos snapped by the James Webb Space Telescope.

BREW'S BETS

From Jordan to Skyler: Here are the top 50 unisex names in the US.

Trombone Champ: It’s in the running for the best video game ever made.

Tech reviews: The second-gen AirPods Pro and the Apple Watch Ultra.

The tragic death that split the art world: For more than 35 years, accusations of murder shrouded one of the art world’s most storied couples. On the podcast Death of an Artist, art historian Helen Molesworth revisits the saga. Listen now.

The robot of all robots: This first-of-its-kind bot doesn’t require any coding—and it’s ready to take on a $114b market that includes the manufacturing, construction, agriculture, and food service industries. Invest before Sept. 29.*

*This is sponsored advertising content.

GAMES

The puzzle section

Jigsaw: Payday + Jigsaw means money and Monet this Friday morning. Play it here.

Friday puzzle

If five = four, six = nine, and seven = five, what does twelve equal?

AROUND THE BREW

Struggling to increase productivity?

Struggling to increase productivity?

Waking up early, meditating, time blocking, win lists…do these strategies improve productivity? See how they worked for the contestants on Can Brew Do It?

This week on Business Casual, Nora chats with Eric Ryan, co-founder of Method, Olly, Welly, and Cast, about building brands and disrupting DTC industries. Listen here.

Want to learn how to build a brand and an audience? Morning Brew co-founder Alex Lieberman is hosting a weeklong virtual intensive course to teach you all you need to know. Grab your seat today.

ANSWER

55. The key here is to notice the hidden Roman numerals in each of the clues. Five = four, six is nine, etc. And twelve is 55, since LV = 55.

         

Written by Neal Freyman, Max Knoblauch, and Matty Merritt

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