KEY POINTS

  • Every $1,000 increase in home price pushes 150,000 buyers away: Report 
  • Rental prices have dropped by 0.1% since last month: Report
  • Homebuying is currently led by people with jobs and equity

Rising demand for homes, unprecedented levels of mortgage rates and low supply have pushed home prices out of reach for prospective homebuyers, which could make America a ‘renter nation,’ Grant Cardone, a real estate investor, told Yahoo.

“Homeownership is still dead in this country because the only people that are buying homes right now are people that have equity, great credit, and a job,” Cardone said.

For every $1,000 increase in home price, 150,000 buyers are priced out of a possible home purchase, according to a recent report by the National Association of Home Builders (NAHB).

The fall season is known to be good for real estate as home prices fall during this time. Realtor.com, however, suggests that median home prices rose to $350,000 in the week ending Oct. 9, almost matching summer highs. This was 12.9% higher than the previous week.

On the other hand, the rental market is looking more desirable and economic with prices dropping. Data from rental website Zumper suggests that the median rent price for a one-bedroom apartment slid 0.1% from last month.

Cardone said a secure job is a way to secure a home loan. Americans would need a better credit score now than they did before COVID-19 to get a home loan, he told Yahoo.

As the pandemic progressed from early February, the American public, especially renters, have higher rates of unemployment, fewer savings to be used for a down payment, and lower credit scores, Elizabeth Renter, an analyst at Nerdwallet, told Yahoo.

Even though the public is struggling with finances, banks have increased their requirements to give out loans,

This column assumes that ETFs are the primary investment tool for the reader.

Please see my weekly market summation for a review of the macro-economic environment and general macro-level market trends.

Investment thesis: the macro-averages are now in a bullish posture; it’s a good time to take a new position. But be careful; defensive sectors are starting to rise, indicating traders are a bit more cautious.

Let’s start by looking at last week’s market activity, beginning with the treasury market:

TLT 5-day

The treasury market moved lower on Monday and then traded sideways for the rest of the week. Volatility was higher on late Tuesday and Wednesday as the market digested the whipsaw activity regarding additional fiscal measures. Also note the sharp sell-off and subsequent rally on Friday, likely due to additional fiscal talk.

SPY 5-day

SPY trended higher for the entire week as shown by the central tendency line in blue. t took the index an entire day to recover from Tuesday’s sell-off, but it did recover.

IWM 5-minute

I noted in my weekly round-up that smaller-caps led the market higher this week. Notice that IWM had a very strong move higher earlier in the week. This explains why small caps did so well last week.

Let’s pull the lens back to the 2-week time frame:

IEF 2-week

During the last two weeks, the treasury market has clearly trended lower, as shown by the 200-minute EMA (in magenta). The ETF has gapped lower twice and then consolidated sideways.

QQQ 2-week

While larger caps are higher, their respective charts are messier. QQQ – which has led the markets higher for most of the post-lockdown rally – is struggling. It’s also been prone to sharper, higher-volume sell-offs.

IJH 2-week

In contrast, smaller caps have stronger charts. Mid-caps have a solid uptrend

Admittedly, there were plenty of pros from Credicorp’s (NYSE:BAP) investor day event. Management’s strategic consistency is commendable, and so is its efforts in driving digital transformation across the organization. Concerns around the evolution of payment behavior of clients and the cost of risk were also addressed.

Nonetheless, I think management has baked in too much optimism into the strategy, which does leave room for a downside surprise. Considering the multitude of risks on the horizon (both economic and political), fiscal 2021 is still likely to be a transition year, and I think it would have been more prudent to assume a more gradual normalization to pre-COVID-19 levels. Valuations have admittedly corrected below historical levels, but shares still trade above better-capitalized LatAm peers (Santander (NYSE:SAN), Itausa (OTC:IVISF), Bradesco (NYSE:BBD)) at c. 1.5x P/B.

Broadly Unchanged Strategic Direction

Somewhat surprisingly, Credicorp’s strategy remained mostly unchanged compared to 2018, when management last discussed its medium-term targets. But considering the lower-growth environment we find ourselves in, this likely reflects some optimism on the part of management. For instance, loans are still expected to grow 7-8% from 2022 onwards (only slightly below the 9-10% growth range outlined before). Credicorp is also expecting a swift rebound in Peru’s GDP following a 12% decline in 2020, with an 8-10% growth outcome projected for 2021.

Digital Initiatives Lead the Long-Term Charge

Digital transformation remains at the forefront of the strategy. While the digital shift helps to improve customer experience, I think the key is that it helps the company capture incremental cost efficiencies. At the forefront of the company’s digital innovation push are Yape (over 4 million users for payments) and Cocos y Lucas (FX operations), which will facilitate the target for 70% of all transactions to go digital in three years.

Source: Credicorp 25

It would be an understatement to say that Canadian pot producer Aurora Cannabis (NYSE: ACB) is having a tough go. The company is coming off a disappointing fourth quarter in which its sales declined 5% from the previous period, and it is forecasting revenue to continue its fall in the next quarter. It has a new CEO, but there are no signs that the leadership switch will provide any immediate fixes. Its shares are already down more than 80% this year and could continue to fall even further. Needless to say, this is not what investors were hoping for.

When billionaire investor Nelson Peltz joined Aurora in 2019, many investors saw him as someone who could add stability and unlock growth opportunities, by using his connections to broker a deal with a company from another industry, not unlike the arrangement rival Canopy Growth (NYSE: CGC) has with Constellation Brands (NYSE: STZ). But since coming aboard, there haven’t been any hoped-for blockbuster deals. Now that he’s resigned, it’s hard not to look back on Peltz’s time with the company as a disappointment. Let’s take a look at what factors may have impacted his ability to make a deal.

Two men, one wearing a black suit and the other in a white shirt, shake hands.

Image source: Getty Images

There were deals happening in the beverage industry, but Aurora stayed on the sidelines

The bulk of the deals in the cannabis industry so far have involved beverage companies looking to tap into a new segment: cannabis beverages. Besides Constellation and Canopy Growth, other notable deals include Tilray‘s partnership with Anheuser-Busch InBev and HEXO‘s joint venture with Molson Coors. Constellation’s situation, however, is the only one in which a company actually spent billions of dollars investing directly in a cannabis producer. It’s been evident over the past few years that if you’re a cannabis company

By Svea Herbst-Bayliss

BOSTON, Oct 9 (Reuters)Billionaire investor Daniel Och, who founded hedge fund Och-Ziff Capital Management, said in a filing on Friday that he plans to raise $750 million through a blank check acquisition vehicle, becoming the latest major hedge fund investor to launch one.

Och, who started Och-Ziff in 1994, retired as its chief executive in 2018 and left the firm, which is now called Sculptor Capital Management SCU.N, last year.

Ajax I, will be managed by Och and investor Glenn Fuhrman, who co-founded MSD Capital, which manages Michael Dell’s fortune, in 1998. Instagram co-founder Kevin Systrom, Square co-founder Jim McKelvey, 23andme co-founder Anne Wojcicki and Chipotle founder Steve Ells will serve on the board.

Ajax sponsors have reduced the promote to 10% instead of the usual 20%, according to the regulatory filing.

Ajax said it will seek a company that operates in the internet, software, financial technology or consumer industries.

Och, through his family office Willoughby Capital Holdings, has a long track record of investing in technology companies including Coinbase, Instacart, Stripe and Robinhood.

He now joins the ranks of hedge fund managers William Ackman’s Pershing Square, Jeffrey Smith’s Starboard Value LP and Daniel Loeb’s Third Point LLC who have all raised pools of capital known as special purpose acquisition companies (SPACS).

A SPAC is a shell company that raises money through an initial public offering to buy an operating entity, typically within two years.

In total, 112 SPACS have raised $42.9 billion through an IPO in the first nine months of 2020, making it the biggest year on record, according to SPAC Research data.

A merger with a SPAC allows a private company to access capital quickly and quietly, which is especially beneficial during the volatile trading conditions that have been influenced