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Home loans are getting cheaper

Mortgage rates are down to their lowest level since February 2023.

9/12/24 11:27AM

Growing certainty that the Federal Reserve will begin a substantial rate-cutting cycle later this month have helped pull mortgage rates down to their lowest level in over a year, potentially throwing a lifeline to a residential real estate market that has seen sales collapse since the Fed started raising rates to beat back inflation.

The 30-year fixed mortgage rate fell to 6.20%, according to the weekly survey numbers produced by Freddie Mac, the government-sponsored entity that buys mortgages and packages them into government-guaranteed securities.

The rate on the 30-year fixed rate mortgages is now down more than 1.5 percentage points from late October, when the Freddie Mac rate hit its recent peak of 7.79%.

With a 10% down payment, that rate drop would lower the monthly payment on a median priced house — roughly $430,000 in July — by more than $400 a month compared to when mortgage rates were at their recent high.

The drop in rates won’t solve the US real estate market’s affordability problem on its own. But it might shore up activity in a part of the economy that has been stuck in a rut.

In Q2, investment in US residential real estate shrank at a 2% annualized rate, even as the economy as a whole posted a strong 3% growth rate.

Jon Keegan13h

Snap soars after announcing $400 million deal with Perplexity, strong earnings

Snap shares shot up as much as 25% in after-hours trading after the release of third-quarter earnings that beat estimates, as well as the announcement of a big deal with AI startup Perplexity to integrate its “conversational AI search” into Snap products. Shares have since pared some of those gains, up 16% as of 4:45am ET on Thursday.

Some highlights:

Revenue came in at $1.51 billion, up 10% year on year (compared to Wall Street’s estimate of $1.49 billion).
Adjusted EBITDA was $182 million (estimate: $124 million).
Global monthly active users hit 943 million, up 7% year on year.
Perplexity will pay Snap $400 million “over one year, through a combination of cash and equity, as we achieve global rollout” of its conversational search engine within Snapchat.

The company also announced a $500 million stock buyback program.

Snap shares rocket 25% on strong forecast, $400 million Perplexity deal

Some highlights:

Revenue came in at $1.51 billion, up 10% year on year (compared to Wall Street’s estimate of $1.49 billion).
Adjusted EBITDA was $182 million (estimate: $124 million).
Global monthly active users hit 943 million, up 7% year on year.
Perplexity will pay Snap $400 million “over one year, through a combination of cash and equity, as we achieve global rollout” of its conversational search engine within Snapchat.

The company also announced a $500 million stock buyback program.

Duolingo dives on Q3 user growth miss, uninspiring guidance

Duolingo has run into stiff headwinds this year.

Matt Phillips13h

Luke Kawa13h

Nvidia slumps as Jensen Huang warns that China “will win” the AI race versus the US

Nvidia tumbled late in the session Wednesday after the Financial Times released an article in which CEO Jensen Huang says that “China is going to win the AI race” because it has a more favorable regulatory environment and cheaper access to power.

Reading between the lines here, I’d say the main takeaway for traders is what’s left unsaid at the end of this sentence: “China is going to win the AI race” — without having access to Nvidia’s flagship processors, or even wanting its nerfed chips!

Not exactly a signal that Nvidia’s hardware is as all-important and synonymous with success in AI as its stock price and revenue trajectory would suggest it is!

President Trump didn’t discuss Blackwell chips with Chinese President Xi at last week’s meeting, being convinced by advisers to keep that off the table. And while Nvidia has the all-clear to sell its H20 chips to China again, China’s internet regulator apparently instructed its leading tech companies not to buy them, preferring to bolster its domestic capabilities.

Max Knoblauch13h

Lucid dips as it lowers its full-year production forecast

Shares of Lucid are down more than 4% in after-hours trading on Wednesday following the luxury EV maker’s third-quarter earnings results.

Lucid, which delivered 47% more vehicles in Q3 than in the same period last year, posted an adjusted loss per share of $2.65, compared to the $2.29 loss per share Wall Street analysts polled by FactSet expected.

The company also:

Booked $336.6 million in revenue, up 68% from last year and above the consensus estimate of $349.5 million.
Updated its full-year production outlook to 18,000 vehicles, the bottom of its previous range of between 18,000 and 20,000 vehicles. Wall Street expected the company to build 18,940 vehicles on the year.

Lucid shares sold off heavily during Q3 as the company executed a 1-for-10 reverse stock split that took effect in early September. The stock remains lower compared to its highs earlier this year and is down more than 40% year to date as of Wednesday’s close. That’s significantly underperforming larger rivals like Rivian and Tesla.

J. Edward Moreno13h

Lyft bookings top estimates as revenue grows

Lyft swung to a third-quarter profit, boosted by 11% revenue growth, as bookings topped Wall Street’s expectations.

Shares were up 2.7% in recent after-hours trading.

The company reported earnings per share of $0.11, compared with a loss of $0.03 in the year-earlier quarter. Gross bookings came in at $4.8 billion, slightly more than the $4.7 billion the Street was expecting. It reported revenue of $1.7 billion, in line with analysts’ expectations.

Lyft’s top competitor, Uber, reported revenue numbers on Tuesday that beat expectations, though its stock still took a dip on the news.