The daily business briefing: September 28, 2022
Home prices fall month-to-month for the 1st time since 2019, the S&P 500 falls into bear market territory, and more
Home prices fall month-to-month for 1st time since 2019
U.S. home prices fell 0.3 percent in July compared to June, the first month-to-month drop since January 2019, according to the S&P CoreLogic Case-Shiller National Home Price Index. The decline came as higher mortgage rates increased monthly payments on new loans, forcing many potential buyers out of the market. Home prices were still up 15.8 percent in July on a year-to-year basis, down from an 18.1 percent annual jump in June. The American Enterprise Institute's Housing Center said prices fell 1.6 percent in August compared to July, with declines in 77 percent of the country's metro areas. "The turn has finally happened, based on actual closings," says Ed Pinto, the institute's director.
S&P 500 falls into bear market territory
The S&P 500 fell 0.2 percent on Tuesday, touching its lowest point in two years. Stocks had risen from mid-summer lows but recently tumbled again as concerns grew that the Federal Reserve's aggressive inflation-fighting interest rate hikes could tip the economy into a recession. The S&P 500 has now had six straight days of losses and is down more than 20 percent from its early January high, officially putting it back in a bear market. The index has fallen 12 percent since Federal Reserve Chair Jerome Powell said in a late-August speech in Jackson Hole, Wyoming, that the central bank is resolved to bring down high inflation even if the effort hurts the economy. Stock futures fell early Wednesday.
10-year Treasury yield briefly rises above 4 percent
The benchmark 10-year U.S. Treasury bond yield briefly rose above 4 percent for the first time since 2008 early Wednesday, continuing a sharp climb triggered by the Federal Reserve's aggressive interest rate hikes to fight the highest inflation since the 1980s. Yields rise when bond prices fall. The 10-year Treasury yield rose as high as 4.019 percent before falling to 3.9945 percent later in the morning, still up 3 basis points for the morning. Surging Treasury yields increase borrowing costs for consumers, businesses, and the government. This week's surge came after hawkish comments by Fed leaders earlier in the week fueled concerns the central bank would raise rates more aggressively than previously expected, sparking a bond selloff.
GM postpones timeline for return to offices after uproar
General Motors announced Tuesday that it is delaying its decision to require white-collar workers to return to the office. The automaker last year introduced a "Work Appropriately" model giving people flexibility to work from labs, offices, or their homes, but last week it said it would make employees return to in-person work three days a week later this year. The announcement sparked a backlash. "We acknowledge that the timing of the message, late on a Friday afternoon, was unfortunate. It was also unintentional," CEO Mary Barra, President Mark Reuss, and other top executives wrote in a memo obtained by The Detroit News. In the memo, the GM leaders said they wouldn't change the "Work Appropriately" model before the first quarter of 2023.
Biden administration approves states' EV charging station plans
Transportation Secretary Pete Buttigieg announced Tuesday that his department has approved electric vehicle charging station plans for all 50 states, Washington, D.C., and Puerto Rico. Buttigieg said the projects, covering 75,000 miles of highways, would "help ensure that Americans in every part of the country — from the largest cities to the most rural communities — can be positioned to unlock the savings and benefits of electric vehicles." The Biden administration earlier this year allocated $5 billion to help states put EV charging stations along interstate highways over the next five years under Congress' bipartisan infrastructure package. States can now go ahead with construction of charging stations along designated alternative fuel corridors.