What I’m Reading
How Low Can You Go? The MBA’s Market Composite Index, which includes purchase and refinance applications, fell 6.5% on a seasonally adjusted basis to 288.4, compared to 645.4 one year ago. That’s the lowest level in 22 years. Reuters What a brutal time to be in the mortgage origination business. See Also: Housing inventory is finally rising, albeit from very low levels. Calculated Risk
Bullwhip: Target lowered its operating-margin guidance for its second quarter to 2%, less than half the margin it telegraphed three weeks ago. The company said it is taking actions to “right-size” its inventory, which will involve more discounts and canceling orders. Inventory levels are swelling and warehouse storage is scarce, meaning discounts are likely coming. Wall Street Journal Welcome to the Peloton economy.
Hitting a Wall: Consumer buying patterns are rapidly normalizing to pre-COVID levels, and U.S. retailers are stuck with too much inventory. The latest ocean container bookings data shows import demand cratering with container volumes reverting to pre-pandemic levels. FreightWaves
Turning Point? Microchips, shipping costs and fertilizer costs are three key supply side inputs that have pushed inflation higher over the past couple of years. Now, all three are falling which could signal that inflation is poised to ease. Bloomberg
Pay Up: Companies are shifting their office spend, renovating spaces in order to lure reluctant workers back. CNBC Office has always been a very capital intensive space. Now its getting more expensive at a time when demand has fallen. Not a good backdrop, especially for older and lower quality properties.
Chart of the Day
This seems bad.
Source: The Daily Shot
WTF
Honest Mistake: A man was bitten by an alligator lurking in the bushes that he mistook for his dog because Florida. Fox 13
Let it All Hang Out: A 74-year old man was arrested after he exposed himself to two teenage girls, jumped in a lake and hid under a dock to avoid arrest because Florida. Cat Country 1071
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
Visit us at RanchHarbor.com