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- Thursday's Scoop: Tired🌤️
Thursday's Scoop: Tired🌤️
Capital One courts Discover & Starbucks gets charged
Scoops Team
July 18, 2024
Hey friends - what are you even doing reading email? It’s the summer. Go do something fun!
Insiders, look out for the Weekly Scoop tomorrow.
Here’s what you need to know today to inform your work, spending, and investments…
🌎 Big picture
Layoffs jumped last week.
A slight drop in mortgage rates has people jumping to refinance.
European policymakers aren’t ready to lower borrowing costs yet, either.
How are you feeling about the economy? |
💼Work trends
Unemployment Rate: 4.1%
Still near historic lows
Layoffs jumped last week. The Labor Department reported initial unemployment claims rose unexpectedly last week to the highest number since last August. Continuing claims, those receiving unemployment benefits for more than a week, also rose to the highest since late 2021. The rise in unemployment was partly influenced by Hurricane Beryl's impact in Texas and summer auto plant shutdowns. Weekly layoff rates are still below pre-pandemic averages, but the upward trend in continuing claims suggests people are having a more difficult time finding work.
👜Cost of living trends
Inflation Rate: +3.0% (YoY), -0.1% (MoM)
Policymakers aim for 2% YoY inflation. (June CPI)
European policymakers aren’t ready to lower borrowing costs yet, either. The European Central Bank (ECB) indicated that economic growth likely slowed in the second quarter, with low investment activity and poor industrial output raising red flags about any potential pickup. Despite these signals, the ECB has not committed to any specific plans to reduce its economic restrictions aimed at slowing borrowing and controlling inflation. Interest rates will stay steady for now in Europe. However, global policymakers often try to move in complementary ways, and investors are betting that the US central bank will begin lowering borrowing costs in September.
🏠Housing trends
30yr Mortgage Rate: 6.9%
That’s down from 7.0% a year ago. (MBA)
Median Home Price: $419,300
That’s up from $397K a year ago. (Existing homes - NAR)
A slight drop in mortgage rates has people jumping to refinance their mortgages. The Mortgage Bankers Association reported a 15% increase in refinance applications last week, the highest level since August 2022. The average interest rate for 30-year fixed-rate mortgages fell from 7.00% to 6.87% due to recent signs of cooling inflation and the increased likelihood of the Federal Reserve reducing baseline interest rates later this year. While refinance activity jumped, home purchase applications fell 3% last week and were down 14% compared to the same week last year. A recent report from Attom showed that amid high mortgage rates, surging insurance costs, and near-record housing prices, homes are less affordable than at any time in the past 17 years.
🤓 Inside Scoop: How does refinancing work?
Refinancing is similar to the original loan process because it’s essentially just getting a new loan that replaces the old one. It usually involves a credit check; mortgage refinancing often requires a property appraisal.
For example, if interest rates fall, we can refinance our mortgage to a cheaper rate with a new lender. The new bank would pay back our mortgage with the original lender and transfer the debt to itself. The new bank earns our business, and we reduce our monthly mortgage cost.
We may often be able to refinance lower at the same lender to keep our business from pursuing a better rate elsewhere.
📈Investment trends
The Market: ⬇️ -0.8%
S&P 500: 5,544.59
1Mo: +1%| 1Yr: +22%| 5Yr: +86%
The market sank lower again on Thursday as the rally lost a little energy. More rumors about President Biden dropping out have weakened confidence in a guaranteed Republican sweep and the tax and regulation cuts that come with it.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
Join the board at America’s biggest companies. Vote and judge their decisions. (+2 pts)
 Capital One | Community Impact Pledge Capital One has pledged $265B over five years toward low-income lending, philanthropy, and regional investment to ease community opposition and regulatory concerns over its plan to buy Discover. The merger of the two credit card giants will make Capital One the largest US credit card issuer and the sixth-largest bank by assets.
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 VF Corp | Supreme Sale Vans and North Face owner VF Corporation is selling its streetwear brand Supreme to Ray-Ban maker EssilorLuxottica for $1.5B, four years after it bought it for $2.1B. The business model will remain unchanged and be used to test innovations and new products.
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 Starbucks | Extra Energy Boost Starbucks and Mercedes-Benz are teaming up to install fast-charging stations at over 100 cafes across the country as part of Mercedes' $1B investment to expand its charging network. The coffee chain pledges to become resource-positive by offering clean energy, storing more carbon than it emits, and eliminating water and product waste.
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 Domino’s Pizza | Weaker Appetites Domino's Pizza is hitting the brakes on its growth plans, suspending its goal of adding 1,100 new stores globally by 2028 due to slower sales. The pizza giant will try to spur growth by partnering with Uber and enhancing its loyalty program.
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 Netflix | Subscriber Surge Netflix gained 8 million subscribers last quarter, over 45% from its ad-supported tier, thanks to new features and popular shows like Bridgerton. The uniquely profitable streaming giant plans to ramp up its advertising power, phasing out its cheapest subscription tier and scaling its ad-supported user base.
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💭Broader perspectives… (+2 pts)
Do you pay for all of the streaming services you use? |
🛠️ Recommended resources (+2pts)
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