📱 iPhone sales disappoint

and homes aren't selling

Good morning investors! September, known for being the worst month for stocks, ended on a positive note for the first September since 2019.

Today we cover:

  • The housing market

  • iPhone sales disappoint

  • Best countries to invest in

📊 Economy and News 

America's Housing Market Stalls: A Record Low in Home Turnover

The U.S. housing market hit a historic low in 2024, with just 2.5% of homes sold, the lowest rate in over 30 years, due to record-high home prices and elevated mortgage rates, making it one of the most unaffordable markets in a generation.

The Impact of Skyrocketing Prices and Mortgage Rates
Homebuyers are grappling with high mortgage rates and record home prices, leading to a 37% drop in sales compared to 2021. Only 25 out of every 1,000 homes were sold from January to August, a 31% decline from 2019. Experts suggest a healthy market would see 30 to 40 homes sold per 1,000.

A key factor is the shrinking inventory—just 32 out of every 1,000 homes were listed for sale in the first eight months of the year, the lowest since 2012.

Geographic Disparities in Housing Turnover

Not all U.S. regions have been equally impacted. California's market is especially sluggish. Boston follows as the second-slowest market, with a 38% drop in turnover over five years. Austin, Texas, a former tech hub hotspot, is also struggling.

In contrast, Phoenix had the highest turnover, though it still saw significant slowdowns compared to the pandemic-driven surge in 2020 and 2021.

Why Homeowners Are Staying Put

Many Americans, locked into low pre-2022 mortgage rates, are reluctant to sell and repurchase at today's higher rates, worsening the inventory shortage. Plus, construction is also slow.

Experts estimate the U.S. needs over 2 million new homes to meet demand. This shortfall has pushed the median sales price to $416,700 in August, marking 14 consecutive months of price increases.

A recent rate cut by the Federal Reserve has sparked optimism for a housing market recovery, but the U.S. market remains stalled and continues to leave buyers and sellers in uncertainty.

Global hits:

Fed speaks: Fed Chair Jerome Powell said Monday that the recent half percentage point interest rate cut shouldn’t be interpreted as a sign that future moves will be as aggressive.

“We are not on any preset course,” he told the National Association for Business Economics while showing confidence in the economy.

Exciting: Mark Zuckerberg joins exclusive $200 billion club, closes in on third-richest person in world.

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Reminder: Port workers are officially going on a strike. In the coming days, experts said consumers could start to experience shipping delays or menu items missing from fast-food joints.

📈 Stocks

S&P 500 5,762.48 (+0.342%)
DJIA 42,330.15 (+0.041%)
NASDAQ 18,189.17 (+0.38%)
BRENT CRUDE 70.13 (-2.19%)
* Prices as of Oct 1st, 12:20 AM UTC

iPhone Figures Disappoint

Apple had high hopes for the iPhone 16, but early sales data reveals a slower start than anticipated. Pre-sale estimates indicate Apple sold 37-40 million units during the first weekend, a 12% drop from last year. The high-end iPhone 16 Pro and Pro Max models saw the biggest declines, with sales down 27% and 16%, respectively, compared to the iPhone 15 launch.

Why? Several factors have contributed to the muted response. Many customers opted for the more affordable iPhone 16 and iPhone 16 Plus, which received significant upgrades, making them comparable to the Pro models. Additionally, Apple's much-touted AI features are not yet available and are expected to roll out later, leaving consumers unconvinced about upgrading. Improved supply chains may also have contributed to shorter delivery lead times. Despite the slow start, analysts remain optimistic about long-term sales, especially heading into the holiday season.

Despite the report, the stock climbed +1.83% yesterday.

The EV Problem: BYD recalls top-selling EVs because of steering component problem. Elsewhere, Ford aims to boost sales of its electric vehicles by addressing potential customer concerns through a new program that includes free home-charging installation and other benefits. However, not all companies are doing well. Stellantis fell nearly -10% yesterday after the world’s fourth-largest carmaker slashed its full-year earnings forecast, blaming a “deteriorating global industry backdrop.”

Must see: China stocks just had their best day in 16 years, sending related U.S. ETFs soaring.

Good to know: AI chipmaker Cerebras files for IPO to take on Nvidia. Furthermore, Google is investing $1 billion in Thailand to build data center and accelerate AI growth

💵 Personal Finance

Consider These Markets for Investment Opportunities

Looking to invest abroad? Consider these options as suggested by BCA Research:

Developed Markets: Strong Political Capital and Economic Resilience

Several developed markets present promising investment opportunities due to their political stability and economic strength.

  • The Netherlands: With renewed political leadership and low dependence on trade with the US and China, the Netherlands stands out as a stable and attractive investment target.

  • United Kingdom: Despite ongoing post-Brexit challenges, the UK shows renewed political momentum and has enough fiscal and monetary flexibility to weather global headwinds.

  • Spain: Recent elections have strengthened Spain's political environment, and improvements in unemployment and inflation trends make it a stable option for investors.

  • Australia: Australia's political stability, along with its geographic advantage in the relatively stable Asia-Pacific region, positions it well for long-term investment.

  • New Zealand: Recent political renewal and geographic isolation provide New Zealand with enhanced stability, making it a favorable investment destination with low trade dependency on major global powers.

Emerging Markets: Growth Potential Amid Global Risks

Among emerging markets, several countries stand out for their political leadership and economic promise.

  • Mexico: Following recent elections, Mexico’s revitalized political capital supports growth-oriented reforms. Despite its close ties to the US, Mexico offers potential if the North American economy remains strong.

  • India: With a newly elected government, India has increased political flexibility to implement key reforms. Its low reliance on the US and China, combined with stable regional conditions, makes it appealing.

  • Indonesia: Strong political capital and manageable exposure to global powers make Indonesia an attractive option for investors seeking stability.

  • UAE: The UAE’s stable leadership and forward-looking economic policies make it a standout in the Middle East, offering resilience in a region often marked by volatility.

  • Chile: A diversified economy and low trade dependency on major powers position Chile well, despite labor market challenges.

High-Risk Markets: Proceed with Caution

Certain markets carry higher risks for investors. China faces slowing growth, trade tensions, and political challenges, while Turkey struggles with political and social unrest. Hong Kong, under increasing influence from China, remains an uncertain investment destination.

💰 Be a Better Investor

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.

Ayn Rand

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.