Bloomberg - Evening Briefing - Homebuyers revolt

Bloomberg Evening Briefing

The US housing market—long crippled by an inventory drought—is finally starting to see listings rise. But in many places, buyers just aren’t showing up. Sellers are grappling with the fact that higher-for-longer interest rates are choking off demand during what’s typically the hot season. And as inventory grows stale, more owners are cutting their asking prices than at any time since November 2022. “With mortgage rates rising back over 7%, the willingness of homebuyers to take a stab this season is diminished,” says Ralph McLaughlin, a senior economist at Realtor.com. “You can have high prices or you can have high mortgage rates, but you can’t have both.” In January, the prospects of rate cuts by the Federal Reserve stirred up optimism for the housing market, which had just emerged from its worst year for sales of previously owned homes in three decades. But the economy continued to roar on, diminishing hopes for cuts. While new data regularly brings changing odds on the Fed’s timing, sellers may be looking at a tough summer ahead. 

Here are today’s top stories

US President Joe Biden is to sign an executive order on Tuesday allowing him to halt some asylum claims at the US-Mexico border. The move will effectively prevent new petitions by migrants who walk across the border until levels drop by roughly two-thirds of where they stand today. US authorities recorded about 4,300 encounters per day in April with undocumented migrants between legal ports of entry. That means the administration can move quickly to bar a large swath of asylum claims. In doing so, it hopes to eliminate a key issue Republicans have sought to use against Biden as he runs for re-election.

Members of the Texas National Guard fire pepper spray at migrants near Ciudad Juarez, Mexico, on May 13. Photographer: Herika Martinez/AFP/Getty Images

The Fed will face a significant risk of losing its independence to ramped-up political interference if Donald Trump is elected president, according to the latest Bloomberg Markets Live Pulse survey. Forty-four percent of respondents said they expect the twice-impeached Republican—now also a convicted felon—to seek to politicize the central bank or limit its power if he returns to the White House. Overall, they put a probability of 40% on the Fed losing its autonomy under Trump.

Millennium Management’s former senior trader Diego Megia kicked off his new hedge fund with $5 billion and closed it to new money on the very first day, becoming one of the largest startups in recent years. As much as $3 billion of the capital for his Taula Capital Management is said to have been raised from Millennium, and the rest from investors including asset managers, pension plans and sovereign wealth funds. 

Claudia Sheinbaum became Mexico’s first female leader in a landslide victory, capitalizing on outgoing President Andres Manuel Lopez Obrador’s popularity while also inheriting rampant violence and a large fiscal deficit left by his government. The former mayor of the nation’s capital and candidate for the ruling Morena party won Sunday’s election by a margin of at least 30 percentage points, according to the nation’s electoral authority. It was a crushing blow for the main opposition led by Xochitl Galvez and further consolidates the party AMLO founded as Mexico’s dominant force.

Claudia Sheinbaum  Photographer: Luis Antonio Rojas/Bloomberg

Sam’s Club is adding some local flair to its store shelves. Walmart’s club chain plans to sell more region-specific products starting this fall—a bid to attract new members and better compete with Costco. Sam’s Club recently hosted its first-ever open call with local suppliers in Texas as it searches for local products to sell in stores across the state. More than 350 suppliers showed up and the company selected about 20 of them. The products will be in Texas stores later this year. The next open call for local suppliers to make a pitch to Sam’s Club is planned for California. 

Nvidia and Advanced Micro Devices’s chiefs showcased new generations of the chips powering the global boom in AI development, deepening a rivalry that may decide the direction of artificial intelligence design and adoption. Jensen Huang and Lisa Su—both born in Taiwan and now local celebrities for leading US tech powerhouses—employed different tacks in conveying their expertise during back-to-back shows at the world’s largest computing conference this week in Taipei.

California and the US Southwest are bracing for the season’s first major heat wave this week, with blistering temperatures set to drive up both electricity demand and health risks. Temperatures are expected to climb to 104F (40C) in downtown Sacramento Wednesday and may get even higher in some parts of the California’s Central Valley, according to the National Weather Service. An excessive heat warning stretches across large parts of California and into Nevada and Arizona. This will be the first major heat wave to strike the West this year. 

The Corral Fire near Tracy, California yesterday Source: California Department of Forestry and Fire Protection/AP

What you’ll need to know tomorrow

How Billionaires Bought and Transformed Detroit

When it comes to Rocket founder Dan Gilbert,a $6 billion bet on Detroit’s comeback is starting to pay off. For the many young people who are flocking to the city’s tony condos and trendy restaurant scene, Detroit bears little resemblance to the crime-ridden emblem of America’s industrial decline that went bankrupt just over a decade ago. As downtowns of cities such as Los Angeles and Chicago struggle with empty offices and a slow rebound from the pandemic, Motown is having a renaissance, thanks largely to a small coterie of billionaires.

Downtown Detroit is thriving–thanks largely to a small coterie of billionaires. Photographer: Emily Elconin/Bloomberg

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