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Safe house
If there’s a safe place in the time of Covid-19 House builder may have found it. The National Association of Home Builders reported Monday that their property index hit its highest level on data from 1985. All three components of the index – builders’ views on current sales, expected sales and pedestrian traffic – rose sharply. This feeling underscores how builders are positioned to weather the crisis in ways that many other companies are not. First of all, builders benefit from mortgage rates that continue to hit new lows. The attractiveness of a single family home with a garden has increased among those with the flexibility of teleworking. And new home buyers tend to be more financially secure than the average American. None of this means that builders have suddenly become recession-proof. But if it gets bad enough to get builders on a loop, they will actually have gotten very bad, writes Justin Lahart.
WHAT YOU NEED TO WATCH TODAY
US housing starts an annual pace of 1.24 million is expected for July compared to 1.186 million in the previous month. (8:30 a.m. ET)
Japan machine orders June and preliminary July trading figures are posted at 7:50 p.m. ET.
TOP STORIES
Taken note with interest
Would you like to refinance? Those Lowest mortgage rates are not for you. Lenders have their best rates reserved for buyers. The average interest rate for a 30-year fixed refinancing mortgage published on Bankrate.com was 3.37% on Friday, well above the 3.14% offer for a purchase mortgage, reports Ben Eisen.
If you’re shopping in the suburbs, don’t commute too far. Amazon.com is Expansion of its physical offices In six US cities and with thousands of corporate jobs in these areas, there is an indication that the tech giant is making long-term plans for personal office work, even as other companies advocate long-term remote employment.
While the real estate market seems to be regaining ground on a healthy clipThere are signs that other sectors are losing some of their steam. The New York Fed’s Empire State poll found that the state’s manufacturing activity grew much more slowly in August than it did in July. Economists are reviewing the report as a potential clue to other regional Fed surveys and are closely monitoring national purchasing managers’ indices. The message so far: “We have seen a number of signs that the economy has been losing momentum recently and this regional indicator for an industry is roughly in line with that message,” said Daniel Silver, economist at JP Morgan Chase .
Credit check
The coronavirus pandemic and national race reckoning have re-illuminated a long-standing source of economic inequality: Black communities have less access to credit than whites. To fill that void, Washington and Wall Street are turning to a small network of lenders precisely set up to address this inequality. Community Development Financial Institutions (CDFIs) are community-based banks, credit unions, and mutual funds that provide loans to home buyers, small businesses, and others in rural, impoverished, and minority communities. Earlier this year, Congress and the Trump administration allocated billions of dollars to CDFIs to provide loans to the Paycheck Protection Program for small businesses. Meanwhile, CDFIs have received millions of dollars in investments from traditional lenders like Goldman Sachs and Bank of America, as well as new backers from companies like Netflix and Google, reports Amara Omeokwe.
The coronavirus pandemic is not falling evenly across racial lines. in the Buffalo, NYBlack workers are exposed to a greater proportion of the impact.
After the gold rush
Warren Buffett’s Berkshire Hathaway has put its gilded name behind one of the greatest Gold mining companiesThis adds to the list of well-known investors making bets tied to the precious metal at a time of significant economic uncertainty. Berkshire announced that it has a $ 565 million stake in Barrick Gold, the world’s second largest gold mining company. The price of gold hit an all-time high this month. The most actively traded futures rose near $ 2,070 an ounce on August 6. They have since pulled back but remain up around 30% for the year. A sharp rise in the price of gold tends to be a sign of economic unease. Many shoppers say they are seeking refuge in gold believing ultra-low interest rates and government incentives put in place in response to coronavirus-related stalemates will undermine the value of paper money and boost inflation, Amrith Ramkumar reports.
Emerging doubts
The dollar has had a bad year, but some Emerging market currencies got worse. The Brazilian real, South African rand, and Turkish lira have all lost about 20% of their value against the dollar this year, putting the former two on their way to their biggest annual declines since 2015. The Russian ruble and Mexican peso are down roughly 15%. In poorer countries, where the pandemic has exacerbated existing problems such as underfunded healthcare systems and tight public finances, investors remain concerned about stuttering economic growth and high levels of coronavirus infections. Sudden and severe currency devaluation, if left unchecked, poses a serious threat to these economies: it can lead to runaway inflation by increasing both the cost of imports and foreign debt payments, while increasing the value of Savings and financial assets are undermining and the domestic is leaving consumers with low purchasing power, reports Caitlin Ostroff.
WHAT WE’LL READ
The coronavirus ends up hardest in parts of the country that are least prepared for the economic consequences. “We saw that there is a strong relationship between Covid-19 cases and pre-Covid crime rates at the county level, and this correlation cannot easily be explained by some known causes of heterogeneity in Covid-19, such as income, minority status, and population density, suggesting that the damage caused by Covid-19 – loss of life and health, decline in employment, destruction of businesses and rise in medical spending – will fall in districts that are particularly unsuitable to wear them. “Economists Rajashri Chakrabarti, William Nober and Maxim Pinkovskiy write at the New York Fed Liberty Street Economics Blog.
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