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Wednesday's Scoop: Float 🌤️
Walmart's drones & Caterpillar's electric dump trucks
Scoops Team
January 10, 2024
Hey friend - biggest news of the week: cable knits are the new half-zips for work from home. I’ve made the switch and am never going back. Catch me on TikTok for a sneak peek.
Here’s what you need to know today…
Big Picture
Bitcoin will join the stock market tomorrow.
Home buying has picked up despite expensive mortgage rates.
Conflict in the Red Sea continues to escalate and disrupt trade.
The Market: ⬆️ +0.6%
S&P 500: 4,783.45
1Mo: +3% | 1Yr: +21% | 5Yr: +84%
The market drifted higher today without much major news as investors waited for tomorrow's inflation report and bank corporate financial reports on Friday.
Bitcoin will join the stock market tomorrow following regulatory approval for an Exchange-Traded Fund (ETF). The Securities and Exchange Commission announced the long-awaited approval of 11 spot bitcoin ETFs from several financial institutions, including BlackRock, Fidelity, and Grayscale. ETFs are funds that trade on the stock market like stocks, opening up the cryptocurrency to mainstream investors and potentially billions in inflows.
Mortgage demand is picking up now that rates are down from their October peak, but they’re still far from cheap. The Mortgage Bankers Association reported applications to purchase a home jumped 6% last week but remained 16% lower than the same week a year ago. The average 30-year fixed-rate mortgage sits at 6.8%.
Conflict in the Red Sea is disrupting one of the most important trade routes in the world. Iranian-backed Houthi militia launched the largest attack yet on roughly 50 commercial ships going through the Red Sea on Tuesday but were met with retaliation from a coalition of 13 nations, including the US. The Houthi group promised to continue the attacks until Gaza received necessary food and medicine. The Red Sea carries 12% of the world’s trade, and shipping companies have been forced to reroute around Africa instead.
How are you feeling about the economy? |
Company Scoops 🗣️🌎💰
💡Practice having an opinion. Build your voice. It accelerates your comprehension and comfort with these topics.
 Walmart | Next-Gen Groceries Walmart unveiled several new artificial intelligence and autonomous innovations for groceries, including AI that predicts shopping lists and delivers to your fridge. The superstore expanded drone delivery to 1.8M more homes in Texas. |
 Caterpillar | Electrifying Construction Caterpillar will be the first to develop all-electric off-highway heavy trucks for one of North America's biggest construction materials companies, CRH. It's the machine manufacturer's first electric venture beyond mining. |
 Intel | Brains for Cars Intel acquired an electric vehicle energy management software company and introduced artificial intelligence chips for cars, aiming to make cars smarter and more efficient. The tech giant will launch the new chips with Zeekr EVs. |
 Taiwan Semiconductors | Turnaround Time The world's largest contract chipmaker signaled an end to the computer chip downturn after several quarters of falling sales as demand waned for PCs and Apple iPhones, its biggest customer. TSMC's sales were flat for the fourth quarter. |
 Match Group | New Direction Tinder promoted its strategy chief, Faye Iosotaluno, to CEO, hoping she would reverse the decline in paid subscribers. An activist investor recently built a massive stake in the Hinge, Match, and Tinder parent to push for improvements. |
(These links only work for 24 hours while the story is live.)
Inside Scoop 🤓
What exactly is a mortgage?
A mortgage is a loan you take out to buy a home. The collateral, the thing you lose if you don’t pay back the money, is the home itself. Collateral reduces the risk for the lender. Borrowing on a credit card is expensive because there’s no collateral.
Mortgage rates can be fixed or floating. A fixed rate means you’ve locked in that percentage of the loan you need to pay back in interest each month, and it won’t increase. A floating rate is usually tied to the movement of a benchmark interest rate. So, as broader interest rates rise, your rate increases, and you pay more each month.
Whether fixed or floating, banks determine their mortgage rates by taking a baseline low-risk lending rate like US Treasury bonds, then marking it up based on how risky you are as a borrower. Banks say, “OK, we can lend to the US Government (considered no default risk) for ten years at 4% interest. You’re more likely to default than the US Government, so you must pay us higher interest to make it worth the risk, maybe 7%.” As baseline rates rise, your rates will increase.
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