🏡 Is The Housing Market Running Out Of Steam?

Good morning. US stock futures rose in Monday morning trading as stock market indexes tried to build on recent momentum.

🏡 US home prices skyrocket as sales stall

📝 Our report: Sales of previously owned homes are at a 30-year low and barely budged in May, with prices hitting a record high and mortgage rates still steep. Existing home sales in May were down 0.7% from April, to an annualized rate of 4.11 million units, according to the National Association of Realtors. That's a 2.8% drop from May last year.

 🔑 Key points:

• The inventory of homes for sale jumped in May, up 6.7% month to month and 18.5% higher than in May 2023.

• The median price of an existing home sold in May was $419,300, a record-high price in the Realtors’ recording, and up 5.8% year over year.

• The Realtors noted in their release that the mortgage payment for a typical home today is more than double what it was five years ago. Not only have rates climbed, but home prices are more than 50% higher than they were five years ago.

💡 So what: The skyrocketing US home prices coupled with stalled home sales have several implications for the economy and potential homebuyers. High home prices, driven by low inventory and high demand, make homeownership less accessible, particularly for first-time buyers and lower-income households. This can widen the wealth gap, as those unable to purchase homes miss out on the financial benefits of home equity. Additionally, with mortgage rates remaining high, affordability is further strained, leading to reduced mobility for existing homeowners who may be deterred from moving or upgrading due to higher borrowing costs.

Monday - San Francisco Fed President Mary Daly Speaks

Tuesday - Consumer Confidence, S&P Case-Shiller Home Price Index

Wednesday - No Major Economic News

Thursday - GDP (revised)

Friday - Richmond Fed President Tom Barkin Speaks in Paris, Consumer Sentiment (final)

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✈️ Prosecutors recommend criminal charges for Boeing

WHAT: U.S. prosecutors are nudging senior Justice Department officials to slap criminal charges on Boeing, claiming the company flubbed a settlement tied to two fatal crashes, according to reports from Reuters. In May, officials determined the company breached a 2021 agreement that had shielded Boeing from a criminal charge of conspiracy to commit fraud arising from two fatal crashes in 2018 and 2019 involving the 737 MAX jet.

WHY: Criminal charges would deepen an unfolding crisis at Boeing, which has faced intense scrutiny from U.S. prosecutors, regulators and lawmakers after a panel blew off one of its jets operated by Alaska Airlines mid-flight Jan. 5, just two days before the 2021 settlement expired.

🤖 Tech giants talk AI partnership

WHAT: Facebook parent Meta Platforms has chatted about slipping its generative AI into Apple's new iPhone AI system, the Wall Street Journal reported. The move comes as Apple plans to add technology from other AI companies on its devices amid reports that it was discussing a potential tie-up with long-time search partner Alphabet's Google.

WHY: Apple announced its long-awaited AI strategy this month, saying it would integrate new Apple Intelligence technology across its suite of apps, including Siri, and bring ChatGPT to its devices, while signaling that it plans to differentiate itself from rivals Microsoft and Google by placing privacy "at the core" of its features.

👟 Apparel manufacturer agrees to settle lawsuit over sales info

WHAT: Under Armour agreed to cough up $434 million to settle a 2017 class action lawsuit accusing the sportswear giant of hoodwinking shareholders about its revenue growth to keep Wall Street happy. The shareholder lawsuit accused the apparel maker and CEO Kevin Plank of intentionally misleading them about the company's financial health.

WHY: The US Securities and Exchange Commission in its investigation found that Under Armour failed to disclose to investors that it employed a sales tactic to accelerate or "pull forward" a total of $408 million in existing orders in the second half of 2015. Under Armour said it has consistently denied the accusations and entered into this agreement in principle, which is not an admission or finding of fault or wrongdoing.

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