BetterHelp + Money Pickle | May 13th, 2024

Today's insights are courtesy of BetterHelp, it was founded in 2013 to remove the traditional barriers to therapy and make mental health care more accessible to everyone.

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GOOD MORNING

Here's everything you need to know today: Signs of economic turbulence are emerging in the U.S. housing market as the percentage of "seriously underwater" mortgages creeps up to 2.7%, with Southern states most affected. This uptick signals potential market distress, which could impact broader economic indicators and reshape investment strategies.

Amid economic uncertainties, gold prices soared, marking their best week in five, propelled by disappointing U.S. job data and heightened expectations of a Federal Reserve rate cut. This surge underscores gold's status as a safe-haven asset during times of financial instability.

In a significant pharmaceutical development, Novavax has entered into a pivotal $1.2 billion agreement with Sanofi to co-develop a combined COVID-19 and flu vaccine. This strategic partnership not only revitalizes Novavax, which had been struggling in the vaccine race, but also sets a new direction for future vaccination efforts.

Let’s dive into more detail below.

ECONOMICS

Underwater Mortgages Rise to 2.7% Nationwide with Southern States the Most Affected

With a notable uptick in homes valued less than their mortgages, economic forecasters worry about the potential for increased defaults and broader financial implications

BREAKING NEWS
The specter of economic turbulence is appears to now be manifesting in the U.S. housing market, as the share of "seriously underwater" mortgages—where the loan balance exceeds the property's value by at least 25%—has incrementally risen to 2.7% in early 2024.

This uptick, reported by real estate analytics firm ATTOM, is notably acute in Southern states, marking a concerning trend for homeowners and investors alike. This development signals potential distress in the real estate market, which could influence broader economic indicators and investment strategies.

WHAT HAPPENED
ATTOM's recent data reveals a subtle yet concerning rise in the percentage of seriously underwater mortgages across the United States, climbing from 2.6% to 2.7%. This increase translates to approximately one in every 37 homes, with the South experiencing the most significant jumps. Kentucky, West Virginia, and Oklahoma have reported notable increases, pointing to regional economic pressures.

Concurrently, interest rates have remained high, hovering around 7.1% for 30-year mortgages, exacerbating affordability issues and increasing the likelihood of more homeowners being financially submerged.

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BIOTECH

Novavax Secures $1.2 Billion Lifeline from Sanofi for Joint COVID-Flu Vaccine Effort

In a major turnaround deal, Sanofi has invested in Novavax, infusing $1.2 billion and taking a 5% stake and marking a significant resurgence for the once-struggling vaccine developer

BREAKING NEWS
In a significant development for the pharmaceutical industry, Novavax has announced a pivotal $1.2 billion agreement with Sanofi, marking a remarkable turnaround for the Maryland-based biotech firm. This strategic partnership involves Sanofi acquiring a minority stake in Novavax and includes a licensing deal to co-develop a combined COVID-19 and flu vaccine. This collaboration revitalizes Novavax, which was previously faltering in the vaccine race, and positions it firmly on the global stage, bolstered by an immediate $500 million upfront payment and potential future milestones amounting to $700 million.

WHAT HAPPENED
Under the terms of the deal, Sanofi will integrate Novavax's COVID-19 vaccine technology with its flu vaccine expertise, aiming to simplify vaccination protocols by combining protection against both viruses into a single shot. This move comes as hospital admission rates for flu and COVID-19 begin to converge, highlighting the need for more streamlined vaccination solutions. Novavax, which received substantial federal support during the pandemic but struggled with production and regulatory challenges, now finds a robust path forward. The partnership promises to enhance Novavax's financial stability and leverages its unique non-mRNA vaccine technology, which offers more storage and accessibility than mRNA vaccines from Moderna and Pfizer-BioNTech.

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COMMODITIES

Investors Turn to Gold as Possible Fed Rate Cuts Speculation Intensifies After Jobs Report

Gold prices surge, reflecting investor uncertainty and the allure of safe-haven assets amid speculation of synchronized rate cuts worldwide

BREAKING NEWS
Gold prices popped Friday, marking the best week in five for precious metals. The increase was most propelled by disappointing U.S. jobs data that heightened expectations of an impending rate cut by the Federal Reserve.

Spot gold climbed about 1% to $2,368.36 per ounce, signaling investor anxiety over economic stability and prompting a shift towards the safe-haven asset.

The rising trend continued from Thursday when gold surged over 1% following reports of an unexpected increase in unemployment benefit claims, underscoring the potential vulnerabilities within the U.S. economy.

WHAT HAPPENED
The momentum in gold prices is a mix of technical market movements and reactions to recent U.S. labor market data, with the latter suggesting potential cracks in economic stability that could influence Federal Reserve policies. Phillip Streible, chief market strategist at Blue Line Futures, pointed out that these employment concerns could accelerate the timeline for the Federal Reserve's rate adjustments, which are expected by many to commence in September. Amid these speculations, gold's appeal has intensified, benefiting from its status as a non-yield-bearing asset that thrives during lower interest rates.

This week's financial discourse also looks ahead to upcoming U.S. economic reports, including the producer and consumer price indexes, which are likely to further sway gold and silver prices depending on the inflation landscape described.

CONTINUE READING ➔

1. New Tariffs on Chinese Electric Vehicles Announced by Biden Administration

The White House is set to introduce significant tariffs on electric vehicles from China, aiming to balance trade deficits and boost the domestic clean energy sector.

2. Bitcoin Market Volatility Declines as Prices Aim for $100K

Bitcoin's volatility has recently decreased, falling below levels seen in major stocks such as Tesla and Nvidia, with experts predicting a potential surge to $100,000.

3. Insights from AI Earnings Reports Highlight Nvidia's Competitive Edge

Earnings analyses from Intel and AMD underscore Nvidia's robust position in the competitive AI chip market, despite growing industry challenges.

4. Arizona Attorney General Investigates Steward Health Care's Bankruptcy

Arizona's AG Kris Mayes has initiated an investigation into Steward Health Care's bankruptcy, amid concerns about its impact on healthcare service continuity and employee welfare.

5. Moderating Core Inflation Brings Slight Relief, Fed Remains Cautious

U.S. core inflation has shown signs of moderation for the first time in months, offering a small respite amidst continued economic pressures on the Federal Reserve.

6. South Korea Announces Over $7 Billion Support Package for Semiconductor Industry

In an effort to bolster its semiconductor sector, South Korea is preparing a substantial $7.30 billion support package aimed at enhancing chip research and investments.

7. Warren Buffett Shares Investment Insights at Latest Berkshire Meeting

At the recent Berkshire Hathaway annual meeting, Warren Buffett provided valuable insights on handling market volatility and the strategic advantage of maintaining liquidity.

8. Core Inflation Cooling Offers Minimal Relief for Federal Reserve

Recent reports suggest that core inflation in the U.S. moderated in April for the first time in six months. While this development offers a glimpse of hope, the Federal Reserve faces continued pressure from ongoing price surges.

9. Bitcoin Volatility Drops as Market Eyes Potential Bull Run to $100K

Bitcoin's market volatility has recently fallen below that of major stocks like Tesla and Nvidia. This reduced volatility is seen as a precursor to a potential price surge, with predictions suggesting a climb towards $100,000.

10. Google AI Faces Criticism for Holocaust Information Refusal

Google's AI technology, particularly its Nest assistant, is under fire for refusing to provide specific answers about the number of Jews killed during the Holocaust, prompting concerns about the AI's programming and its implications on historical accuracy.

CONTINUE READING ➔

Today's insights are courtesy of BetterHelp, it was founded in 2013 to remove the traditional barriers to therapy and make mental health care more accessible to everyone.

Take the Personalized Assessment ➔

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