Housing Prices Rise Despite Rates

Last week, mortgage interest rates experienced their most significant weekly decline over a year, sparking the first rise in mortgage applications in four weeks. The Mortgage Bankers Association's seasonally adjusted index revealed a 2.5% increase in the total mortgage application volume from the previous week.

Interest rates for 30-year fixed-rate mortgages on loan balances up to $726,200 saw a notable reduction last week, falling from 7.86% to 7.61%. In addition, points decreased from 0.73 to 0.69, including the origination fee, for mortgages with a 20% down payment. Despite the most significant weekly drop in interest rates in over a year, the incentive to refinance remains low, with only a 2% rise in refinancing applications over the week - still 7% lower than the same period last year. This is mainly because mortgage rates are roughly equivalent to those from last year, and most homeowners already refinanced during near-record low rates about two years ago, with a majority now having rates below 4%.

While applications for refinancing showed modest movement, those for home purchases climbed 3% over the week. However, this figure is 20% less than recorded during the corresponding week of the previous year. The dip in interest rates has not been adequate to counter the impact of elevated housing prices, which continue to soar amidst a notably low housing inventory.

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MICROSOFT: Dominating the AI Race

Microsoft has had an unbelievable month. Their stock just hit a record high, they dominated earnings, and the Activision-Blizzard deal just closed. However, one of their most significant wins is coming from their investment in ChatGPT. Sam Altman, CEO of OpenAI, recently announced that ChatGPT has hit 100MM weekly users. The most incredible part for Microsoft is their $30 billion investment into ChatGPT is now worth upwards of $90 billion. ChatGPT had a huge event this week and announced a plethora of significant updates that will only help Microsoft products.

Last week saw Microsoft unveiling a new AI enhancement for its Office suite subscriptions, as well as an AI-powered assistant for Windows 11, both of which are built on the models developed by OpenAI. Microsoft has significant plans to incentivize developers who are programming applications on OpenAI to use Microsoft Azure cloud infrastructure, which could also help them in the cloud race.

DISNEY: Possible Proxy Fight

When you discuss companies, you usually don’t talk about their board of directors. However, Nelson Peltz, CEO of Trian Fund Management, is looking to bring a huge proxy fight to Disney’s board. According to CNBC, Peltz is waiting to see how Disney’s Q3 earnings are on Wednesday afternoon before he makes his big move. Peltz has acquired around $2.5 billion worth of Disney shares. During Wednesday's earnings call, it remains to be seen whether Disney will communicate any information that might persuade Peltz to retreat. Despite Disney's move to eliminate 7,000 jobs this year, Trian is likely looking for proof that these job cuts and reductions in content expenditures are positively impacting profits.

In theory, Peltz would like to be given a board seat without having to go through the formal nomination process. However, Bob Iger isn’t the biggest fan of Peltz, so this seems to be very unlikely. Peltz has until January 4th to nominate potential new board members.

Headlines You Need To Know: 🎙

• Steve Cohen to partner with Hard Rock for $8 billion Met’s casino

• Democrats win major state-wide elections

• Amazon beefs up Prime rewards

• Health AI startup Cercle debuts with big backers

• TikTok owner ByteDance offers employees buyback options

• Biden-Xi meeting can help ease trade tensions

• Fed needs to forget about inflation and focus on jobs

• The cost of home buying and selling will change due to the court ruling

Accidental Invention

This complete failure led to one of the most popular items ever that you use every day. In 1968, Dr. Spencer Silver, a chemist at 3M, was on a mission: to create the strongest adhesive ever. Instead, he accidentally created the weakest. This ‘oops’ moment was overlooked until 1974, when a colleague, Art Fry, sang in a church choir. He became frustrated when the bookmarks he used to mark his place in his hymnal kept falling out. Recalling Dr. Silver’s adhesive, he decided to apply it to his bookmarks. The result was remarkable! The bookmarks held firmly, yet they could be repositioned and removed without any damage to the pages. Little did he know that he was on the verge of changing history.

Fry came up with the idea to use these adhesives on small notes, and 3M launched the product under the name “Press N Peel” in 1977. Unfortunately, the product was a failure, but 3M didn’t give up. They rebranded the product into “Post-it notes” and changed the color to a canary yellow. They soon became one of the most popular office products in the world.

Chart of the Day

📊 Central Banks Are Cutting Rates At Fastest Pace

Central banks around the world are cutting rates at the fastest pace since August 2020.

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