HOUSING

The Rent Market is Softening, But For Many Low-Income Americans, the Costs Are Still Too High

Ask an American what the “American Dream” means to them, and they might say a family, a house, and a luxury car out front. But dreams often differ from reality — especially when just over half of Americans are renters. For some, renting is a lifestyle choice — with more affluent Americans choosing it for its flexibility and ease of maintenance. But for many Americans, it’s the only option — and it’s never been worse.

State of the renter: Although higher-income renters drive most new apartment demand, millions of Americans with no alternatives are facing the toughest rent market of their lives. According to Rent.com’s June report, nationwide rent prices are up 0.7% year-over-year to $1,654 — the highest since 2022. A Harvard University study shows that higher rents translate to a record burden on lower-income tenants — a problem even the housing market’s mild softening is unlikely to solve.

• According to the new report, 22.4M households spent over 30% of their income on rent and utilities in 2022 — and 12.1M spent over 50%.

• Over the past year, eviction filings in six major metros are up 35%+ compared with pre-COVID levels, according to Princeton’s Eviction Lab — contributing to a record amount of people experiencing homelessness.

Where’s the Roof Over America’s Head?

Urban planners suggest building more to fix the housing crisis. Although 1.6M units are under construction across the US, some regions still struggle with a supply-demand mismatch. As a result, politicians are stepping in with solutions to the cost of living crisis.

• This week, the Biden administration proposed withdrawing tax credits from landlords who raise rents by over 5% per year, targeting larger landlords for two years.

• Democrats also plan to offer first-time homebuyers a $10K tax credit, aiming to increase access to single-family homes.

Crack in the ceiling: While both policies are well-intentioned, experts warn that these policies might not work. Rent controls have been shown to discourage housing development, limiting access and prompting landlords to hike rents by the maximum amount. The tax credits proposed by the Dems would simply subsidize demand — and increase the cost — of single-family homes, which many young people are losing interest in. Unfortunately for Americans, the only way out of the housing mess is through.

PARTNERED WITH STANSBERRY RESEARCH

Free Look at the System That Found Nvidia at $7 a Share…

In 2020, a stock-picking system called the Power Gauge issued a “bullish” alert on Nvidia. At the time, the stock was trading for a split-adjusted $7 a share.

Back then, few analysts were talking about the company, and few were focused on chipmakers. But the Power Gauge was certain… Nvidia was going to take off – and it was right.

• If you had bought and held Nvidia then, you’d be sitting on gains as high as 1,800% — and that’s far from the Power Gauge’s only victory.

• Over the years, it has isolated dozens of winning companies – including many of the top AI stocks of 2023 and the top stocks of 2022.

The technology behind the Power Gauge is used by some of the world’s leading hedge funds, as well as the financial tools offered by Bloomberg and Reuters.

Start using the Power Gauge today.

LARGECAP RECAP

🌐 The Republican Party’s Endorsement of Crypto Is Helping It Dodge A Downturn

Conservatives and libertarians have always had a soft spot for blockchain technology and cryptocurrencies, but the American right had never officially addressed its love affair with the asset class… until now. In an effort to win over thousands of single-issue, crypto-conscious voters, the Republican Party is embracing crypto — and pushing prices up in the process.

• Last week, the Bitcoin Conference announced that Republican presidential candidate Donald Trump would be its headline speaker — sending Bitcoin prices up 11%.

• Compounding the bullish news, Trump selected Ohio Senator JD Vance as his running mate this week — adding an enthusiastic, pro-crypto candidate to the Republican ticket.

Taking the orange pill: The Republican Party’s support of crypto comes weeks after the defunct Mt. Gox crypto exchange announced it would begin repaying $9B worth of bitcoin to creditors. Investors feared this would weigh on prices — prompting a month-long decline in the world’s largest cryptocurrency and prices as low as $55K. But with the seemingly unstoppable Trump on their side, plus the anticipated approval of new Ethereum ETFs in the cards, digital gold might start to look like a golden opportunity again.

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Markets & Economy

Mortgage investors skip securitization: Firms linked to Apollo ($APO) and KKR ($KKR) are increasingly buying mortgage loans directly instead of through mortgage-backed securities, seeking better yields despite the need for sophisticated management capabilities. [Read]

DOE proposes AI initiative: The Department of Energy (DOE) unveiled plans to develop energy-efficient AI supercomputers to address energy usage concerns. The agency already oversees some of the world’s fastest supercomputers. [Read]

BofA earnings dip: Bank of America’s ($BAC) Q2 profit fell nearly 7% to $6.9B due to high interest rates affecting lending. The bank anticipates improvement in the second half of 2024 but set aside $1.5B for potential credit losses. [Read]

Business & Wealth

Apple improves Android messaging: With the release of iOS 18, Apple ($AAPL) has introduced Rich Communication Services (RCS) support, enhancing cross-platform messaging with Android devices. Features include high-res media sharing and read receipts, but encryption is absent. Green bubbles remain for non-iMessage chats. [Read]

Hydropower faces challenges: Hydroelectric generation hasn’t kept pace with solar and wind power. Changes in weather patterns and competition for freshwater have reduced output. Doubling dam construction by 2050 is needed to meet climate objectives, but progress is slow. [Read]

Social Security fears drive younger workers to save more: 47% of US workers doubt Social Security will pay them upon retirement. Despite presidential opposition to benefit cuts, this skepticism has led younger workers to bump up retirement savings. [Read]

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DIGIT OF THE DAY

Global Cinema Revenue Set to Reach $44B, Still Short of Pre-COVID Levels

Cinema isn’t dead yet… and a happy ending might be on the horizon. Last year, Hollywood faced several box office letdowns due to industry strikes. But with a 30.4% rise in box office spending in 2023 and new blockbusters like Pixar’s “Inside Out 2” and “Despicable Me 4” this year, the industry is setting the stage for a cinematic comeback.

• By 2026, global cinema revenue is expected to top pre-pandemic levels — with box office revenues exceeding $40.2B and total gross eclipsing $44B.

• Although ticket sales may not fully recover, advertising revenue is projected to reach $1T by 2026 and could drive over half of the entertainment industry’s boost by 2028.

The show goes on: The global entertainment and media industry is on track to achieve $3.4T in revenue in 2028 — primarily driven by online advertising. This growth is bolstered by the return of live events like sports and concerts, and the gaming sector, projected to hit $300B by 2028. Facing fierce competition, the streaming industry is increasingly adopting ad-based revenue models, expecting these subscriptions to make up 28% of total streaming revenues by 2028.