Closing Stock Market SummaryToday's trade was mixed as market participants reacted to a heavy batch of earnings, the latest policy move by the FOMC, and Fed Chair Powell's subsequent commentary.
The FOMC voted unanimously to raise the target range for the fed funds rate by 25 basis points to 5.25-5.50%, as expected. The policy directive also upgraded the description of economic activity to expanding at a moderate pace from continuing to expand at a modest pace in the June directive.
The market reaction was relatively muted as investors looked ahead to Fed Chair Powell's press conference, which induced some whipsaw price action for the major indices.
Mr. Powell acknowledged that inflation has moderated somewhat since the middle of last year. Nonetheless, the process of getting inflation back down to two percent has a long way to go. The Fed currently doesn't see inflation getting down to two percent until 2025 or so. The Fed will continue to make its decisions meeting by meeting. The idea, though, that the Fed would keep hiking until inflation gets to two percent would be a prescription of going way past the target and that's clearly not the appropriate way to think about it.
By and large, the Fed Chair was non-committal about the next move. Ultimately, the major indices closed near where they were trading before the policy directive was released at 2:00 p.m. ET.
Expectations for a second rate hike at any of the meetings before the end of the year were largely unchanged. According to the CME FedWatch Tool, probability of a second rate hike at any of the remaining FOMC meetings this year remains under 40%.
On the earnings front, Microsoft (MSFT 337.77, -13.21, -3.8%) and Alphabet (GOOG 129.66, +6.87, +5.6%) were among the more influential movers, garnering mixed reactions from investors, along with Visa (V 237.10, -1.59, -0.7%), Boeing (BA 232.80, +18.68, +8.7%), Coca-Cola (KO 63.05, +0.80, +1.3%), and AT&T (T 14.89, +0.09, +0.6%).
Microsoft reported better-than-expected earnings and revenue, but logged a decent declined due to some profit-taking activity after guiding fiscal Q1 revenues slightly below the consensus estimate. Alphabet and Boeing, meanwhile, offered some offsetting support.
The broader market held up fairly well today as evidenced by the 0.2% gain in the Invesco S&P 500 Equal Weight ETF (RSP) while the market-cap weighted S&P 500 closed flat.
Regional bank stocks were a pocket of strength after the news that PacWest Bancorp (PACW 9.76, +2.07, +26.9%) and Banc of California (BANC 14.71, +0.09, +0.6%) are merging in an all-stock transaction. The SPDR S&P Regional Banking ETF (KRE) rose 4.7%.
Strength from its regional bank components helped the Russell 2000 to outperform its peers, gaining 0.7%.
The S&P 500 communication services sector (+2.7%) was the top performer by a wide margin, thanks to Alphabet, while the information technology sector (-1.3%) finished in last place, weighed down by Microsoft.
- Nasdaq Composite: +35.0% YTD
- S&P 500: +18.9% YTD
- Russell 2000: +12.4% YTD
- S&P Midcap 400: +12.2% YTD
- Dow Jones Industrial Average: +7.2% YTD
Reviewing today's economic data:
- The weekly MBA Mortgage Applications Index fell 1.8% with purchase applications dropping 3.0% and refinance applications remaining flat from last week.
- New home sales decreased 2.5% month-over-month in June to a seasonally adjusted annual rate of 697,000 units (consensus 722,000) from a downwardly revised 715,000 (from 763,000) in May. On a year-over-year basis, new home sales were up 23.8%.
- The key takeaway from the report is that new home sales activity, which is measured on signed contracts, was crimped in June by rising mortgage rates that created added affordability pressures.
- The weekly EIA crude oil inventories showed a draw of 600,000 barrels after last week's draw of 708,000 barrels.
Looking ahead to Thursday, market participants will receive the following economic data:
- 8:30 ET: Advance Q2 GDP ( consensus 1.6%; prior 2.0%), advance Q2 GDP Deflator ( consensus 3.0%; prior 4.1%), Weekly Initial Claims (consensus 233,000; prior 228,000), Continuing Claims (prior 1.754 mln), June Durable Orders (consensus 1.0%; prior 1.7%), Durable Orders ex-transportation (consensus 0.2%; prior 0.6%), June advance goods trade deficit (-$91.1 bln), June advance Retail Inventories (prior 0.8%), and June advance Wholesale Inventories (prior -0.1%)
- 10:00 ET: June Pending Home Sales (consensus 0.3%; prior -2.7%)
- 10:30 ET: Weekly natural gas inventories (prior +41 bcf)
iPhone 15 Pro: Action button functions revealed by iOS 17?
According to code snippets discovered by Steve Moser and published on MacRumors, the new button that replaces the mute switch will have plenty of options for what can be assigned to a click. We’ll update our coverage if we corroborate the findings.
According to their findings, the iPhone 15 Pro button will have nine assignment options: Accessibility, Shortcuts, Silent Mode, Camera, Flashlight, Focus, Magnifier, Translate, and Voice Memos.
We expect silent mode to move to Control Center like on iPad and iPod touch. If the reported code snippets are correct, many of the other Control Center tile functions will be assignable to the new button above the volume buttons.
For iPhone photographers, being able to assign the new button to be a dedicated Camera app launcher will be especially useful.
Apple previously made a Smart Battery case that featured a dedicated button for launching the Camera app, but it went away with the move to the MagSafe version of the battery.
The dedicated camera button worked by automatically launching the Camera app with a single click – even if the display was off and the iPhone was locked. It sounds like that same convenience could come to many more functionalities on the iPhone starting with the iPhone 15 Pro in September.
Russia unleashes missile barrage across Ukraine
Moscow switches focus of attacks from Black Sea ports to inland targets including military airfield
Explosions were reported in cities across Ukraine early on Wednesday evening as Russia carried out a missile barrage more than a week into an air strike campaign that has until now targeted ports along the Black Sea coast.
“Sounds of explosions . . . air defences are at work,” reported the administration of Khmelnytsky region, west of the capital Kyiv. Explosions were also reported in at least several other regions, including Zhytomyr, also west of the capital, Sumy in the north-east and Kirovohrad to the south.
“It turned out to be a difficult day, but thanks to the co-ordinated actions of all the defenders of the sky, we repelled this attack!” Mykola Oleshchuk, commander of Ukraine’s air force, said on social media: “36 enemy cruise missiles were destroyed.”
Ukraine’s president Volodymyr Zelenskyy said in his evening video address to the nation that “the absolute majority” of missiles fired “were shot down”.
“There are several hits, and there are falling fragments of missiles. But it is very important that the audacity of this attack was destroyed,” Zelenskyy added.
A claim that Starokostiantyniv air base, in the Khmelnytsky region of western Ukraine, was hit could not be independently verified because Ukraine does not confirm successful Russian strikes on military targets.
But Col Yuriy Ignat, the air force’s spokesperson, confirmed in an appearance on Ukrainian state television that the air base had been a main target on Wednesday.
Ignat said some of the cruise missiles had headed into Ukraine from the east and went south, only to turn north-west towards Lviv, the largest city in western Ukraine. Then, he added, they did a “180-degree turn”, flying back to the east towards the air base.
The strikes came as air raid sirens went off nationwide for a second time during the day.
“The firing of cruise missiles was recorded from 12 TU-95MS [bombers] in the Caspian Sea region,” Ukraine’s air force command said in a statement that warned of the incoming strikes.
Minutes later the air force added that “high-speed missiles from the north” had also been fired and urged citizens across the country to “take cover” in bomb shelters.
Ukraine’s air force said two cruise missiles fired earlier on Wednesday had been intercepted over the Vinnytsia region, south-west of Kyiv.
Joe Lewis, the British billionaire facing US insider trading charges
Former FX trader and majority owner of Tottenham Hotspur is accused of feeding information to friends, partners and personal pilots
For decades Joe Lewis traded everything from currencies and real estate to football clubs and art, amassing the fortune that has allowed him to travel the world on private jets and his 98-metre yacht Aviva.
But on Wednesday the octogenarian Bahamas-based billionaire surrendered to US authorities in New York after prosecutors charged him on allegations of insider trading spanning almost a decade.
An indictment unsealed on Tuesday casts a harsh spotlight on a mysterious investor known for flashy trades and acquisitions, most notably London’s Tottenham Hotspur, one of the best known clubs in global football.
Prosecutors portrayed a man who used inside information gleaned from investing in public companies to tip off his friends, romantic partners and personal pilots — two of which are also facing charges — to trading opportunities.
However, his lawyer David Zornow of Skadden Arps said the US government had made an “egregious error in judgment in charging Lewis, an 86-year-old man of impeccable integrity and prodigious accomplishment”, adding that the firm would vigorously defend the billionaire against the “ill-conceived charges”.
Within the documents is the accusation that in October 2019 Lewis lent two of his private pilots $500,000 each to buy stock in Nasdaq-traded Mirati Therapeutics. They later repaid the loans.
One of the pilots told a friend over text that he thought “the Boss has inside info” and “knows the outcome” because “otherwise why would he make us invest”, according to the indictment.
An employee of the hedge fund through which Lewis held a significant shareholding in Mirati allegedly joined Lewis that September on his yacht, which was docked in California. The prosecutors claim the hedge fund employee shared non-public information with Lewis about “positive developments” in a clinical trial.
The prosecutors allege that Lewis also told his assistant and three friends to buy Mirati shares before the company announced details of the clinical trial.
In another case, prosecutors claimed a board member at the Australian Agricultural Company had told Lewis the company had suffered “material” losses from flooding in Queensland because it had no insurance on its cattle.
Lewis allegedly told the two pilots that they should sell AAC stock they had previously purchased “as soon as possible”. However, their stockbroker “was unable to execute their sell orders” before the company announced the news in February 2019.
“Just wish the Boss would have given us a little earlier heads-up”, one of the pilots emailed in response to an apology from the stockbroker, according to the indictment.
Prosecutors also allege that Lewis shared confidential information about another biotechnology company, Solid Biosciences, with a girlfriend during a stay at the Four Seasons Hotel in Seoul. Lewis is alleged to have told her to buy its stock after he was informed about a positive clinical trial and forthcoming fundraising.
The girlfriend bought $700,000 of shares in Solid Biosciences, using up nearly all the money in her brokerage account, according to the indictment. Once the company had disclosed information about the clinical trial, the girlfriend is alleged to have sold her shares at a profit of about $849,000.
The two pilots are also alleged to have profited on Solid Biosciences after Lewis tipped them off on the flight from South Korea to the US.
Until recently, he was best known as the majority owner of Tottenham, a north London club that plays in the Premier League. However, corporate filings show that he relinquished control of Spurs in October 2022.
Tottenham is held by Bahamas-based ENIC, a company majority-owned by a family trust that the club says counts “certain members” of Lewis’s family as “potential beneficiaries”. The club has been subject to takeover interest from US and Qatari investors over the years, as foreign investors have been lured into the Premier League.
“This is a legal matter unconnected with the club and as such we have no comment,” Tottenham said.
Lewis was born in an east London pub in 1937, a decade in which US securities laws were being reformed in response to the market abuses of the Great Depression. After dropping out of school aged 15, he joined the family catering business and went on to establish a chain of themed restaurants.
He left the UK in 1979 and moved to the Bahamas and a change of tax regime. His Tavistock Group owns stakes in more than 200 companies in 13 countries and art by Pablo Picasso, Henri Matisse and Lucian Freud.
But Lewis was also part of the generation of traders that transformed foreign exchange markets away from being just the humdrum business of servicing corporate deals or trade and towards a playground for speculators and big hitters in leveraged macro trading.
Like Hungarian-born hedge fund trader George Soros, Lewis is known for betting against sterling and profiting from Britain’s exit from the European exchange rate mechanism in 1992.
Lewis has previously confirmed that “Black Wednesday” gave him one of his biggest gains but rejected criticism for targeting the Bank of England.
‘’All it proved was that the markets were right and the politicians were wrong,” he told the New York Times in 1998. “It’s part of making a market. It’s the free flow of cash around the world.”
Despite a reputation for shrewd trades, Lewis swallowed a $1bn loss after buying shares in Bear Stearns in 2007, a year before JPMorgan rescued the Wall Street bank amid the credit crunch.
His nickname among FX traders at banks was “Two Scoops”, according to a former trader who dealt with Lewis, because “any time he did a trade he would wait a few minutes to see how the market digested it. If it went his way, he would buy another lot”.
“He’s no Soros,” the former trader said. “East End geezer, fingers in many pies”.
Unlike Soros, who was educated at the London School of Economics, Lewis was “a proper old-fashioned Englishman”, said one banker who knew him.
“He was a serious guy and he traded serious amounts,” said another former trader. “He was legitimately risk-taking in a very unforgiving market that makes fools of most people pretty quickly.”
Airbus and Boeing stick with plans for increased output
Buoyant demand for bestselling jets despite supply chain problems hitting production
Airbus and Boeing stuck with plans to increase output of their bestselling jets amid buoyant demand from airlines despite persistent supply chain problems that have hampered production.
The world’s two largest aircraft makers on Wednesday said strong demand for commercial aircraft had driven revenues and earnings in the first six months of the year.
Boeing and Airbus are both taking orders to deliver planes late in the decade as airlines seek to expand fleets as well as replace older aircraft with more fuel-efficient models. Yet supply chain challenges stemming from the Covid-19 pandemic have persisted.
Guillaume Faury, Airbus chief executive, reaffirmed the European company’s target to deliver about 720 aircraft by the end of this year as well as to raise output of its best-selling A320 family of jets.
The manufacturer said adjusted earnings before interest and tax had risen 34 per cent to €1.85bn in the second quarter, while revenues increased 24 per cent to €15.9bn, driven by higher aircraft deliveries.
Faury said domestic air traffic had recovered and was “even exceeding” pre-pandemic levels. International air traffic, he said, was “close to or even above” levels last seen in 2019 in most regions.
The company said output of its best-selling A320 family of jets was “progressing well” towards its previously announced rate of 75 aircraft per month in 2026, adding that it would make “tactical adjustments” to production planning as required to meet the target rate. Faury insisted the company had not withdrawn a previous interim target to reach 65 jets but was focused on hitting its rate of 75.
He said challenges and bottlenecks were continuing to impact the supply chain. “We see a rather complex situation that remains challenging with a number of critical suppliers,” he said.
Airbus is working with enginemaker Pratt & Whitney on problems affecting its latest-generation GTF engine which powers some of its A320neo family of jets.
Pratt’s owner RTX on Tuesday said a “rare condition” in powdered metal meant 1,200 of more than 3,000 engines built for the A320neo between 2015 and 2021 would have to be recalled and inspected for micro cracks.
Airbus does not expect disruption to aircraft deliveries in 2023, Faury said, while adding that there could be indirect consequences later on from the amount of extra work RTX would have to do as part of the extra maintenance.
“It will be a lot of work for P&W . . . There might be indirect consequences,” he said.
Arch-rival Boeing, meanwhile, reported a net loss of $149mn in the second quarter, aided by commercial jet deliveries and earnings from maintaining aircraft, but hampered by costs.
The US company’s revenue grew 18 per cent to nearly $20bn as it delivered 136 commercial jets between April and June amid high demand from airlines and lessors.
But “abnormal costs” dragged on Boeing and it reported a $383mn operating loss.
TD Cowen analyst Cai von Rumohr said the company was probably referring to costs from fittings improperly installed into the fuselage of the 737 Max by supplier Spirit AeroSystems, as well as quality problems with the fuel tank for the 767 freighter.
Boeing’s space and defence business also reported a loss, of $527mn. The company reported charges on fixed-price defence programmes totalling $514mn.
But the loss at the company overall was smaller than Wall Street expected — an adjusted loss of 82 cents per share, rather than 89 cents.
Chief executive David Calhoun called it a “solid” quarter, with Boeing “remaining on the right path to restoring our operational and financial strength”.
Boeing said it would begin building 38 737 Maxes a month, up from 31. It is now making four 787 Dreamliners a month and plans to hit a rate of five by the end of the year.
Calhoun stressed that, despite the demand, the manufacturer would not build 737s faster than 50 a month.
While the market exists to build 60 Maxes a month, Calhoun said, the company needed to focus on execution.
“It’s not a simple thing to do, and I don’t want us to get ahead of ourselves,” he said.
The Luxury Home Market Confronts Its New Reality: Not Enough Buyers and Sellers
Sales at the high end continue to decline, as homeowners pull back on listing properties and would-be buyers grapple with high interest rates and recession fears
When Joan Dangerfield, wife of the late comedian Rodney Dangerfield, first walked into her Los Angeles home in the early 2000s, she knew immediately that she would buy it. The Art Deco-style estate, perched in the coveted Bird Streets above L.A.’s Sunset Strip, had dramatic views spanning Downtown Los Angeles to the ocean and Catalina Island.
“I stepped 3 feet into the house and I knew it was the place for me,” said Dangerfield, who paid $6.25 million for the property. “It swept me away.”
Roughly two decades later, Dangerfield, 70, is trying to sell the home—and finding that would-be buyers aren’t as eager as she once was. The $17.8 million listing for her property has been active since February and while she has received several full-price offers, they have come with complicated contingencies, such as requiring her to provide seller financing, she said.
“I figured it would sell in a week, but didn’t quite work out that way,” she said of the house, which is comparably priced with other homes in the area. “It was a shock for me to just watch it sit there on the market.”
Luxury sellers across the country are finding themselves in similar circumstances, as the high-end real-estate market faces a perfect storm of rising interest rates, recession fears and population shifts in the wake of the Covid-19 pandemic.
Sales of luxury homes nationwide, defined as the top 5% of homes based on estimated market value, declined by 24.13% in the three months ended June 30, compared with the same period last year, according to a new report by brokerage Redfin. Inventory of luxury homes was down 2.39% during that same period, while the median sales price for a luxury home was up by 4.55%. In many metros, homeowners appear to have pulled back on listing homes in light of the market shift. New luxury listings were down by 17.08% year-over-year in the three months ended June 30, Redfin’s data shows.
Sales of nonluxury homes also fell during the same period, but that drop—19.42%—was smaller than the decline in the luxury market, according to Redfin.
“The luxury market is definitely hurting in terms of transactions,” said Daryl Fairweather, Redfin’s chief economist. “Even when you compare it to the rest of the market, it’s looking like luxury has really cooled off.”
The report marks the continuation of a market slide that began in earnest last spring, following an unprecedented deal-making frenzy during the pandemic. Redfin’s data shows that sales began to plummet significantly as early as June 2022, as buyers began to grapple with inflation and a volatile stock market. In the first quarter of 2023, luxury sales volume was down by 33.3% year-over-year.
Some of the biggest drops in sales volume over the three months ended June 30 were in markets that seemed unstoppable during the pandemic. The Miami metro area saw the largest drop in activity, for instance, with a 40.14% year-over-year reduction in luxury transaction volume for the three months ended June 30, according to Redfin.
Other metro areas with large drops included Nassau County on New York’s Long Island, where luxury sales volume dropped 39.34% year-over-year, followed by New York City, down 35.98%, Los Angeles, down 36.17%, and Chicago, which was down 34.13%.
Real-estate agents and industry experts said the luxury market’s performance has been uneven. That often comes down to pricing: In areas where sellers have capitulated to the declining market and dropped prices, transaction activity is holding relatively steady. But in markets where sellers are clinging to pandemic-era prices, activity has taken a nosedive.
In the San Francisco area, for instance, where median sales prices for luxury homes were down by 12.73%, there was only a 4.04% drop in transaction volume. “Because the prices have fallen, it’s opened up the opportunity for people who say, ‘I might finally be able to buy,’ ” Fairweather said.
In contrast, in markets like New York, Chicago and Los Angeles, prices have remained consistent or even risen slightly from last year, but transaction activity is way down. “There’s less demand, but it’s not enough of a pullback in demand to draw down prices,” Fairweather said.
In Miami, industry insiders say it is lack of supply, not lack of demand, that has caused the drop in activity. That’s thanks in large part to the mass migration to Miami and buying frenzy during Covid. “People who are going to sell have already sold,” Fairweather said, noting that new luxury listings in the Miami area were down by 33.1% year-over-year in the three months ended June 30. “There are definitely people who are moving to Miami who want to buy homes, but there are not necessarily homes for sale.”
Heigo Paartalu said he’s looking for another waterfront property but hasn’t found anything to buy. PHOTO: YACHTWAY
Heigo Paartalu is among those buyers frustrated by a lack of inventory properties.
Paartalu, a Cigarette boat dealer and CEO of YachtWay, a digital boat show company, said he and his wife purchased a modern, five-bedroom house on Hibiscus Island, a gated island in Miami Beach, for $6 million in late 2021. The home value shot up 25% after about a year, so they cashed out and sold the house for $7.5 million in early 2023. Now, with a budget of around $10 million, they are looking for a waterfront property in the area without luck. “The inventory is very low and we’re not seeing the prices come down, which is what we were hoping for,” he said. The couple is currently renting in Miami’s Edgewater neighborhood for $24,000 a month.
Jeff Miller of ONE Sotheby’s International Realty, Paartalu’s broker, said some homeowners aren’t selling because prices have gotten so high they won’t be able to buy something else in the area. Others don’t want to walk away from low mortgage rates. “It’s creating a huge shortage in our supply of available inventory and homes,” he said.
Even with a limited supply of inventory in Miami, Dina Goldentayer of Douglas Elliman said buyers have more leverage than they did last year for things like home inspections and closing credits. “I’m no longer taking the position of, ‘Take it or leave it,’ ” she said. “There are clear shifts that are making it seem like a normal market.”
In Los Angeles, the issues in the luxury market go far beyond an inventory crunch. Real-estate agent Juliette Hohnen of Douglas Elliman estimated that her business is down roughly 50% in that market from this time last year. At the height of the pandemic-fueled market, she said, she had signed as many as 10 deals in a month. This July, she has only one so far. She chalked up the drop to rising interest rates, an outward migration from Los Angeles to lower-tax states, the introduction of a new mansion tax and more recently, the strike by both the actors’ and writers’ unions. She said she was slated to show an Oscar-winning writer around L.A. homes this month, but he called off his search in favor of renting amid the strikes.
The rising interest rates are keeping inventory low and stymying sales activity, Hohnen said. “Anyone who bought in the last few years has got these crazy low interest rates, usually between two and three percent,” she said. If those buyers sell now, they’ll be incurring rates that are almost double and potentially taking a loss on the sale.
Hohnen said she bought a $2.525 million home in 2021 in the Sag Harbor area of the Hamptons, securing an interest rate of just 1.875% for an adjustable-rate mortgage. Normally, she would buy, renovate and flip, but not this time, she said. “I’m never going to sell that house. I could never afford it if I was buying now. The monthly expenses on a new house would be too high.”
Dangerfield said she didn’t foresee how detrimental the mansion tax would be for her home’s prospects. The new measure, which was implemented April 1, requires sellers to pay 4% on sales of homes priced between $5 million and $10 million, and 5.5% on sales of properties at $10 million or above. “We were flooded with shoppers in March. Then, things just came to a screeching halt. It was such a change in the amount of people coming to view the home that it felt like it wasn’t even on the market,” she said.
One of Dangerfield’s agents, Marcy Roth of the Eklund Gomes team at Douglas Elliman, said the ULA tax “tainted buyer sentiment,” especially when combined with other issues like rising interest rates. “Everything is muddy and offers are complicated,” she said. “There aren’t a lot of quick, clean deals.”
In Chicago, real-estate agent Katherine Malkin of Compass said the city’s downtown area and so-called Gold Coast have been most affected by the slowdown. She said quality of life concerns like crime and an outward migration of some of the city’s businesses has put a damper on sales. Citadel, for instance, the hedge fund headed by billionaire Ken Griffin, recently left the city and moved to Miami. Other businesses that recently relocated their headquarters from Chicago include Boeing.
“You have businesses that are leaving because of the taxes,” Malkin said, noting that some prominent Chicago philanthropists and entrepreneurs have also left the city in the past few years. “They went to Florida, they went to Texas, they went to states that had a much lower tax circumstance. That’s been a difficult thing for people to grasp.”
Some sellers, Malkin said, have been reluctant to lower prices significantly—median luxury sales prices were actually up by more than 6.82% in Chicago in the three months ended June 30—which has been a further drag on sales. “No person of means wants to give their property away when they feel that they’ve invested in it,” she said.
When sellers have capitulated to the market, it has led to activity, Malkin said. She said one of her clients, who public records identify as private-equity executive John Weaver “Jay” Jordan II, recently lowered the price of a roughly 20,000-square-foot townhome in the Gold Coast neighborhood to $15.75 million from the $18.75 million it listed for in 2020. While the home hasn’t yet sold, the price cut resulted in a new wave of interest, Malkin said. Jordan, who paid $1.8 million for the house in 1996 and remodeled it extensively, didn’t respond to a request for comment.
Although luxury median sale prices in the New York metro area are up by 7.69% for the three months ended June 30 compared with the year-earlier period, the slower pace of sales has allowed some opportunistic buyers to ink great deals. Vanessa Lucin of the Corcoran Group recently worked with buyers who paid $6 million for an Upper West Side apartment that was first listed for $7.495 million in June 2022. The roughly 3,383-square-foot apartment has two private balconies and is currently configured as a four bedroom, according to StreetEasy. Lucin said the couple is relocating to New York from California and began searching in January, when the market had slowed from its Covid peak. “There was another offer on the table but it wasn’t going anywhere,” she said.
Daniel Parker, co-head of Compass New Development Marketing, said some recent condo closings reflect deals struck during the more robust market in 2021 and 2022. In pockets of the city, such as Billionaires’ Row and Hudson Yards, developers have offered significant discounts. “They are embracing the market we have rather than the market they wish we had,” he said.
However, there are signs of life. Agents in New York reported a recent pickup in big-ticket deals this summer; in particular, large downtown condos have been the “golden sweet spot” of the market, said luxury real-estate agent Donna Olshan. A string of megadeals downtown over the past few weeks include the $52 million off-market sale of a penthouse at 150 Charles Street, the $50 million off-market sale of penthouse at 151 Wooster Street, and a signed contract for a penthouse asking $52 million at One High Line in Chelsea.
Sylvia Hughes, Lucin’s client, said she and her husband, John Hughes, saw several apartments before making an offer on their new four-bedroom on the Upper West Side. “I think the seller was motivated. This apartment had languished,” she said. By the time they saw it, the original $7.495 million asking price had been reduced to $6.195 million and their offer of $6 million was accepted. “I was beginning to wonder if we should have offered less.”
Converium sticks with El Salvador bond bet after 180% return
Converirium Capital, a hedge fund firm founded by former Fir Tree partners Aaron Stern, and Elliot Ruda, and ex-Clarke executive Michael Rapps in 2021, is sticking with its bet on El Salvador bonds, despite the debt posting a 180% return over the past year, according to a report by Bloomberg.
The report cites Nadir Cura, an investment analyst at Converium, as revealing that while most of Wall Street shunned the country on concerns over President Nabob Bukele's "obsession" with bitcoin, the Montreal-based firm built a bond position in the belief that those fears were "overblown".
And with Bukele having shown himself to be more fiscally responsible than leaders of some other developing nations, Converium, which managed around $345 million at the end of February, according to the latest regulatory filings, sees more value to come.
“El Salvador still offers attractive value when compared to other stressed EM sovereigns, many of which are struggling with substantially larger fiscal deficits and external funding gaps,” Cura said in an interview.
Italy Says it Will Build the Longest Suspension Bridge in the World. Don’t Hold Your Breath.
Plans for a structure connecting Sicily and mainland Italy have existed for decades
Italy might build the longest suspension bridge in the world. Or maybe it won’t.
Italy’s government has rekindled an idea that politicians have been discussing for 160 years: building a single-span suspension bridge between Sicily and the Italian mainland. The two-mile link across the Strait of Messina would be 50% longer than the longest suspension bridge in the world and would be held up by two towers, each taller than the top floor of the Empire State Building.
Proponents, chief among them Italian Infrastructure Minister Matteo Salvini, say it will bring jobs and economic growth to Italy’s depressed south and will be a source of national pride. But a project first imagined in the 1860s as a way to promote national unity has become a symbol of the country’s inability to turn talk into action, or at least to stop the project once and for all.
The Sicilian Connection
Italy is planning to build a bridge linking Sicily and the Italian mainland. If completed, the two-mile-long suspension bridge would be the world’s longest.
Parliament approved the plan in May. Salvini has promised to break ground by the middle of next year and have the bridge operational by the early 2030s. He has brushed off the cost concerns, saying that Italian artists Michelangelo, Raphael and Leonardo never had their projects subjected to a parliamentary cost-benefit analysis.
In addition to the cost, detractors cite the environmental impact, the seismic risk in a region plagued by earthquakes and the possibility that the mafia will snag some of the construction contracts. They also say money would be better spent upgrading the decrepit existing infrastructure in Sicily and Calabria, the region in the toe of the Italian boot.
Italians can be excused for thinking this is déjà vu.
In the early 1950s, the government created a company to study how to connect Sicily to the mainland. A quarter-century later, the company was still considering options, which ranged from a suspension bridge to a tunnel and a suspended underwater tube. A new government-backed company eventually settled on the suspension bridge and then in 2001 then-Prime Minister Silvio Berlusconi chose a contractor, but he lost re-election before work could begin and under his successor, parliament canceled the project.
Berlusconi, who died in June, tried to revive the plan in 2011 only to have it canceled once more the following year by a new government that said it was financially unsustainable while Italy faced a sovereign-debt crisis.
The estimated cost has ballooned from 5 billion euros, equivalent to $5.53 billion, at the beginning of the century to €13.5 billion now, which doesn’t include the costs for adding the necessary infrastructure to connect the bridge to existing roads. The government has been vague about where it will get the money to fund the bridge.
The infrastructure ministry declined to comment. On the day the bridge received final parliamentary approval, Salvini wrote on Twitter: “Today is a great day not only for Sicily and Calabria but for all of Italy. I’m proud of this new achievement.”
The bridge’s biggest cheerleader is a recent convert. In 2017, Salvini said the money would be better spent on more prosaic infrastructure such as improving the country’s train system. He made his point by riding the train from Trapani on Sicily’s western coast to Agrigento in the southwest of the island. It took nine hours on several trains and a bus to cover about 110 miles.
Groups that have fought the bridge for decades are mobilizing once again. Last week, Legambiente, one of Italy’s most prominent environmental activist groups, released a report called, “The Big Bluff. The Truth About the Bridge Across the Strait.”
“We need to develop an alternative to the bridge that uses technological innovations to improve existing rail transport and ferry services between the continent and Sicily,” said Giuseppe Alfieri, the chairman of Legambiente’s chapter in Sicily.
In Sicily and Calabria more than 40% of the trains still run on diesel fuel rather than electricity, which makes trains generally cleaner, faster and more reliable. The majority of train lines in Sicily and Calabria have just one track, which leads to frequent delays.
Italy isn’t alone in having one of its big infrastructure dreams on a permanent loop. Thailand has been talking for 300 years about digging a canal to connect the Pacific and Indian oceans. Over the past 150 years, the U.K. has occasionally considered linking Scotland and Northern Ireland with a bridge or tunnel, an idea that never made it past a feasibility study, in part because of the estimated cost of the bridge of £335 billion, equivalent to $429 billion
At 1,310 feet, the Messina bridge’s two towers would be a third taller than the towers of the Golden Gate Bridge. The height allows builders to avoid erecting a tower in the middle of the Messina strait, which has strong currents and plunges away quickly from the coastline.
“The length of the main span is a challenge, but it’s something engineers have solved,” said Martin Mensinger, the chair of metal structures in the school of engineering and design at Technical University of Munich who remembers his professors discussing the bridge more than 30 years ago when he was a student. “The special shape of the so-called Messina deck limits undulations due to wind-induced vibrations, and solves one of the major problems of bridges with such a long span,” he said.
While there is still no bridge over the Strait of Messina, studies done for the eventual structure produced the new Messina Type Deck, which rather than one contiguous deck has openings that allow the wind to pass and reduce the sway.
Italy’s infrastructure ministry says the bridge would be able to withstand 170 mph winds, higher than the strongest winds ever recorded in the area, and a 7.1 magnitude earthquake, equaling the force of the 1908 quake that flattened Messina. The bridge would have three lanes for traffic in each direction, two railroad lines and be about 200 feet wide. It would sit more than 200 feet above the strait, allowing large ships to pass underneath.
Webuild, an Italian general contractor that leads a consortium that held the commission to build the bridge, says it can complete the project in a little more than six years once the contract is reinstated. In April, the company’s head of engineering told a parliamentary commission that earthquake resistance would be guaranteed up to a magnitude of 7.5.
Turkey’s 1915 Canakkale Bridge, which opened last year and is the world’s longest suspension bridge with a main central span of about 1.3 miles, was built with a Messina Type Deck.
“The Canakkale Bridge is confirmation that the design for the Strait of Messina works,” said Marco Belloli, the head of the mechanical engineering department at Milan’s Polytechnic University, who specializes in wind and did extensive wind-tunnel work to refine the design for the Messina bridge.
“One hundred years ago you wouldn’t have been able to build the Messina bridge, but methods, material and competencies have improved,” he said. “Now it’s feasible.”