Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here’s an overview of what happened this week.
Work-From-Home Era Ends for Millions of Americans (March 25, Wall Street Journal) Working remotely is becoming increasingly rare a few years after the pandemic caused millions of Americans to decamp from worksites to their basements and bedrooms.
Some 72.5% of business establishments said their employees teleworked rarely or not at all last year, according to a Labor Department report released this week. That figure climbed from 60.1% in 2021.
There’s another looming cliff — the end of the student-loan repayment moratorium (March 27, MarketWatch) …Thomas Simons, money market economist at Jefferies, says there’s another worry on the horizon: the looming end of the student loan repayment moratorium.
Citing New York Fed data, he says the average student loan payment for a borrower not in deferment was $393 per month — about 1% of spending, depending on which metric is used. “This may sound like a modest hit, but the impact on income is very similar to the tax increases associated with ‘The Fiscal Cliff’ of 2013, which was followed by a noticeable slowdown in consumption,” he says.
A Tale of Two Housing Markets: Prices Fall in the West While the East Booms (March 27, Wall Street Journal) In all of the 12 major housing markets west of Texas, plus Austin, home prices fell in January on an annual basis, according to mortgage-data firm Black Knight Inc.’s home-price index. In the 37 biggest metro areas east of Colorado, except Austin, home prices rose year-over-year.
This pattern of geographical disparity is highly unusual, if not unprecedented, housing analysts say.
Markets Are Wrong on US Rate-Cut Bets, BlackRock Says (March 27, Bloomberg) “We don’t see rate cuts this year – that’s the old playbook when central banks would rush to rescue the economy as recession hit,” the strategists said. “We see a new, more nuanced phase of curbing inflation ahead: less fighting but still no rate cuts.”
The firm is retaining an underweight position in developed-market equities, it added.
Rent growth drops back to pre-pandemic levels, but some markets are falling much harder (March 28, CNBC) Apartment rents have increased slightly for the past few months, as the seasonally stronger spring activity kicks in. But in March they were only up 2.6% from a year earlier. That’s the smallest annual gain since April 2021.
After last year’s record-setting pace, rent growth is now slightly below the pre-pandemic average of 2.8%.
Elon Musk and other tech leaders call for pause on ‘dangerous race’ to make A.I. as advanced as humans (March 29, CNBC) Elon Musk and dozens of other technology leaders have called on AI labs to pause the development of systems that can compete with human-level intelligence.
In an open letter from the Future of Life Institute, signed by Musk, Apple co-founder Steve Wozniak and 2020 presidential candidate Andrew Yang, AI labs were urged to cease training models more powerful than GPT-4, the latest version of the large language model software developed by U.S. startup OpenAI.
The Stock Market Keeps Forging Ahead. 2 Big Reasons for the Optimism. (March 29, Barron’s) The stock market simply refuses to drop these days—at least significantly.
There are good reasons for this stubbornness.
“Lower yields and a view that a tightening cycle has begun should support higher stock prices for now,” wrote Chris Harvey, chief U.S. equity strategist at Wells Fargo.
Flight to Money Funds Is Adding to the Strains on Small Banks (March 30, Bloomberg) Keeping interest rates on deposits near zero is becoming increasingly untenable, with the collapse of Silicon Valley Bank, Signature Bank and Silvergate Capital Corp. putting savers on high alert for better and safer alternatives. But raising rates enough to compete with money-market funds is also a nonstarter that would crush profit margins and potentially roil stock prices.
Wild Quarter for Markets Might Foretell Further Turbulence (March 31, Wall Street Journal) In the face of significant uncertainty, markets proved to be more buoyant than many investors thought possible.
The S&P 500 has risen 5.5% in the first quarter, while the Dow Jones Industrial Average has fallen just 0.9%. The Nasdaq Composite soared. The technology-heavy index has jumped 15%, on pace to outperform the Dow industrials by the widest margin since 2001.
Key Fed inflation gauge rose 0.3% in February, less than expected (March 31, CNBC) An inflation gauge the Federal Reserve follows closely rose slightly less than anticipated in February, providing some hope that interest rate hikes are helping ease price increases.
The personal consumption expenditures price index excluding food and energy increased 0.3% for the month, the Commerce Department reported Friday. That was below the 0.4% Dow Jones estimate and lower than the 0.5% January increase.
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I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.