Monday's Scoop: Slow☀️

Hey friend - hope you enjoyed the early spring weekend. Catch up with our Weekly Scoop!

Here’s what you need to know today to inform your work, spending, and investments…

1. Consumer spending keeps slowing.

2. Companies are struggling to pay their debts.

3. Real estate broker commissions are set to fall this year.

Unemployment Rate: 3.9%
^{Still near the lowest rate in 50+ years}

Companies worldwide struggle to manage debt payments amid slowing business activity and expensive interest rates. Credit rating agency S&P Global reported 29 corporate defaults in January and February, the most in the first two months of the year since the Great Financial Crisis of 2009. Most defaults have been in the US, but corporate failures have accelerated in Europe. Healthcare, media, and entertainment have suffered the worst of it.

Inflation Rate: +3.2% (YoY), +0.4% (MoM)
^{Policymakers aim for 2% YoY inflation.}

Americans continue to tighten their spending to deal with high prices. Bank of America reported total card spending across their millions of customers rose only 0.4% in February after falling 0.3% in January. These numbers aren’t adjusted for price inflation. Lower-income households continue to cut back, while Americans in the highest income brackets continue to take up a larger share of overall consumer spending each month. In good news, Americans’ account balances aren’t falling as quickly anymore and remain higher than in 2019. People are making more money. After-tax income also looks to be improving across lower and middle-income households.

30yr Mortgage Rate: 6.8%
^{That’s up from 6.7% a year ago. (MBA)}
Median Existing Home Price: $379,100
^{That’s up from $361K a year ago. (NAR)}

Real estate broker commissions are set to fall this year. The National Association of Realtors (NAR) settled a lawsuit last week that will change how real estate agents get paid, potentially reducing costs for people buying or selling homes. Previously, sellers often paid a 5-6% commission, which was determined by and split between their agent and the buyer’s agent. Under the new settlement, this fixed commission structure will no longer be allowed, and agent fees will be opened for more negotiation. This change, effective from mid-July, could lower the expenses for homebuyers and sellers and may lead to new ways of doing business in real estate. However, it also complicates the buying and selling process, especially for first-time buyers.

The Market: ⬆️ +0.6%
S&P 500: 5,149.42
1Mo: +4% | 1Yr: +30% | 5Yr: +84%

The market floated higher on Monday without any major drivers. Investors are waiting to hear the Federal Reserve’s next policy move on Wednesday. No one expects the Fed to cut interest rates yet, but it will be important to hear their guidance.