Stock Futures Sink After US, Israel Attack Iran; Oil, Gold Jump

What If the Real Reason Homes Are So Expensive Isn’t A Housing Shortage? Here’s What It Means for You

FROM 11 minutes ago

An analysis by researchers at the Federal Reserve Bank of San Francisco challenges the common assumption that homes have gotten more expensive because too few have been built.

The analysis, published earlier this month, showed that cities across the country have built housing faster than their populations have grown. Home prices, meanwhile, tend to rise alongside incomes. Indeed, the housing supply grew faster than the population, even in expensive markets like San Francisco.

In other words, rising incomes, not a shortage of housing, could be fueling the soaring cost of houses.

The research by a team led by Schuyler Louie, a doctoral student at the University of California, Irvine, could reframe the debate over what’s causing the housing affordability crisis—and how to fix it.

Read the full article here.

–Diccon Hyatt

Why the New Fed Chair May Struggle to Slim Down the Central Bank

FROM 28 minutes ago

When Federal Reserve Chair nominee Kevin Warsh joined the Fed in 2006, the central bank had less than $850 billion in assets. It now has $6.6 trillion, or nearly eight times more.

The gargantuan rise has long drawn skepticism from Warsh, who may now decide it’s time to reduce the Fed’s footprint in financial markets. But that footprint also helped calm markets during panic. The Fed absorbed trillions of bonds during the 2008 and 2020 crashes. And it spurred ultra-low mortgage rates in 2020, prompting a boom in homebuying and refinancing.

Moreover, markets are now used to a massive Fed balance sheet—and a return to pre-2008 conditions would be tricky, to say the least.

“Doing it is akin to forcing the toothpaste back into its container. Not impossible, but it risks being a right mess,” wrote Padhraic Garvey, regional head of research for the Americas at the Dutch bank ING.

Read the full article here.

–Polo Rocha

Big Oil, LNG Shares Soar on Middle East Conflict

FROM 1 hr 7 min ago

Stock futures may be sinking Monday morning because of the escalating conflict in the Middle East, but it is proving beneficial to energy shares.

Big oil stocks and those of liquefied natural gas (LNG) providers are soaring before the bell along with West Texas Intermediate crude and natural gas futures, which jumped about 8% and 5%, respectively.

Shares of U.S. oil giants Exxon Mobil (XOM) and Chevron (CVX) surged 5% and 4%, respectively, about 90 minutes before the bell, while those of Occidental Petroleum (OXY) and Phillips 66 (PSX) were up a respective 7% and 3%.

Meanwhile, LNG suppliers Venture Global (VG) and Cheniere Energy (LNG) soared 11% and 7.5%, respectively, while QatarEnergy said it had stopped LNG production because its facilities were attacked by Iran.

Airline Stocks Sink as Middle East Flights Canceled

FROM 1 hr 57 min ago

Global airline stocks dropped Monday as numerous carriers’ operations in the Middle East shut down following U.S. and Israeli bombings of Iran and Iran’s retaliatory strikes.

According to FlightAware data, Middle Eastern carriers Emirates, FlyDubai, Etihad Airways, Gulf Air, and El Al all have canceled at least 60% of their flights today. Dubai-based Emirates was particularly hard-hit, with the carrier canceling 500 flights, or 95% of its scheduled operations today.

Shares of several large European carriers that fly to or through the Middle East sank. Air France-KLM plunged 12% in Paris trading, Deutsche Lufthansa retreated 6% in Frankfurt trading, and British Airways parent International Consolidated Airlines Group, or IAG, sank 6% in London trading.

Meanwhile, U.S. carriers Delta Air Lines (DAL), United Airlines Holdings (UAL), and American Airlines Group (AAL), which also fly to the Middle East, were down between 5% and 6.5% in premarket trading.

Stock Futures Plunge After US, Israel Attack Iran

FROM 2 hr 46 min ago

Futures contracts connected to the Dow Jones Industrial Average pointed 1.1% lower.

S&P 500 futures also were down 1.1%.

Nasdaq 100 futures pointed 1.4% lower.