Monday's Scoop: Tired☀️

Hey friend - I hope you enjoyed the Super Bowl as much as Usher did.

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Here’s what you need to know today…

1. People are less worried about rising living costs.

2. Low-income Americans are falling behind on their mortgage payments.

3. Companies spent a lot of money on Super Bowl ads.

S&P 500: 5,021.84
1Mo: +5% | 1Yr: +21% | 5Yr: +81%

The market drifted lower today after breaking a new record high on Friday. It was a light news day for the economy. Investors recovered from their Super Bowl parties and waited for tomorrow's critical inflation report.

Americans don’t expect inflation to return to how it was anytime soon. The Federal Reserve’s monthly survey indicated that consumers expect living costs to rise by only 3% over the next year and 2.4% annually over the next three years. That’s lower than the hefty price spikes in the past few years and much closer to the 2% annual inflation policymakers want to see. Expectations matter because they can be self-fulfilling, as consumers spend more and businesses raise prices in anticipation of higher costs.

Low-income Americans are falling behind on their mortgage payments. The Mortgage Bankers Association reported increased delinquencies nationwide in the fourth quarter, though the overall amount is not concerning. Only 3.9% of mortgages had past-due payments at the end of the year, lower than last year and below the long-term average of 5.3%. However, delinquencies spiked for Federal Housing Administration (FHA) loans designed to help low- to moderate-income families. The percentage behind on payments jumped to the highest level in over a decade, excluding the pandemic.

Companies paid big bucks for Super Bowl ads this year. Typically the most-watched television event of the year, the national football championship received over 115 million viewers last year and seems to have passed that this year, according to iSpot, an audience measurement firm. Companies paid an average of $7 million for a 30-second slot, up from $42,000 in 1967. It’s not just the airtime but the production as well. High-profile celebrity appearances are now the standard in commercials. According to the Wall Street Journal, less than a third of Super Bowl commercials were celebrity-free this year.

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What are green bonds?

When companies need extra cash to invest in their business, they can sell shares in their company (stock) or take on debt. That debt can be regular loans from banks, revolving credit facilities like a corporate credit card, or bonds. When companies issue bonds to the public market, they borrow from several investors at once. Each bond is like a tiny loan they have to pay interest on.

Green bonds are a special kind of bond in which the company can only use the money for sustainable projects like renewable energy, waste reduction, or conservation. Green bonds are a relatively new financing type that often comes with better tax treatment or cheaper interest rates to incentivize sustainable investment.