What we’re reading (8/25)
“Companies Strike While The Stock Market Is Hot” (Wall Street Journal). “U.S. companies are rushing to cash in on soaring stock prices. It isn’t just the white-hot market for initial public offerings. Companies are returning to the public markets to issue shares and raise cash from investors at the same time that existing shareholders are tapping the public market to unload their stockholdings at a record clip.”
“Record-High Stock Prices Are Increasing The Risk Of ‘Fragility Shocks' In The Next Few Months, Bank Of America Says” (Business Insider). “Record-high stock prices and a possible change in Federal Reserve policy have heightened the risk of ‘fragility shocks’ hitting equities in the coming months, Bank of America analysts said. Last week's sell-off on Tuesday and Wednesday was a sign that investor sentiment remains nervy and could be vulnerable to bigger shocks in the future, analysts including Riddhi Prasad and Benjamin Bowler said in a note on Tuesday.”
“Mortgage Rates Fall For The First Time In 3 Weeks, But Demand Is Still Light” (CNBC). “After rising for three weeks, mortgage rates came back down a bit last week, but it didn’t seem to have much effect on mortgage demand. Total application volume rose 1.6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.03% from 3.06%, with points falling to 0.29 from 0.34 (including the origination fee) for loans with a 20% down payment.”
“Where Are The Borrowers?” (DealBook). “The job of a banker, an old joke goes, can be summed up by the 3-6-3 rule: Gather deposits at 3 percent, lend them out at 6 percent and be on the golf course by 3 p.m. These days, banks pay next to nothing in interest, yet they are awash in deposits. They also offer loans at rock-bottom rates, yet see little demand from borrowers. What are they doing with the money instead? Bingeing on bonds, The Times’s Matt Phillips reports.”
“How Blackstone Built The Perfect Pandemic Portfolio In Real Estate” (Fortune). “On a spring day in 2019, the chief of property investments in the Americas for private equity powerhouse Blackstone was gazing down from the rooftop terrace of the 14-story, avant-garde Netflix building on L.A.’s Sunset Boulevard—the streaming giant’s creative headquarters. The jammed parking lots, the parade of technicians, writers, actors, and producers rushing from office towers to low-slung studios, all told Meghji that this buzzing epicenter for content creation exemplified one of the best real estate opportunities on the planet. ‘This wasn’t just another cluster of office towers,’ he recalls. ‘It was critical infrastructure for making the online entertainment that was already exploding in a new way[.]”
