(KRON) — In today’s installment of Winners & Losers, financial expert Rob Black discusses market gains, a fall in home sales and a decrease in college enrollments.
Winner: Markets jump higher as July rebound continues
Stocks rose, extending gains from the prior session as traders considered more corporate earnings.
Netflix shares jumped on better-than-expected second-quarter results.
Some investors have been encouraged by the recent trading action, believing it is signaling that the bear market has bottomed.
The Senate has advanced a bill to use more than $50 billion to boost U.S. semiconductor production. But the current legislation comes more than one year after the Senate first approved a $250 billion bill to reinforce U.S. chipmaking to compete with China.
Netflix surprised in its second-quarter earnings report, announcing it only lost 970,000 subscribers after previously warning it could shed as many as 2 million. Stranger Things season 4 has been watched for over 1.3 billion hours since it launched in late May.
$2.5 billion . . .What credit card swipe fees will cost merchants during the back-to-school season. That will cost almost $20 for the average family. Swipe fees are many retailers’ highest operating cost after labor. Since the fees are a percentage of transaction amount, they will grow as inflation increases, putting additional pressure on both retailer and consumer.
Loser: June home sales fell 5.4% from May
Sales of previously owned homes in June fell 5.4% from May as prices set records and rates surged.
Sales were 14.2% lower compared with June 2021, the slowest pace and below the annual 2019 total.
These numbers are based on home closings, so the contracts were likely signed in April and May before the average rate on the 30-year fixed mortgage shot above 6% and as inflation was surging.
We have never seen mortgage rates shoot up this fast at this magnitude.
Inventory now stands at a three-month supply. That is still considered low but is improving.
The median price of an existing home sold in June set yet another record at $416,000, an increase of 13.4% year over year.
Activity continues to be stronger on the higher end of the market, where there is more supply.
The average time a home spent on the market was 14 days, a record low.
The key takeaway is that higher mortgage rates and home price inflation are contributing to a slowdown in buyer demand rooted in affordability pressures that are expected to persist.
First-time buyers accounted for 30% of sales in June, up from 27% in May and down from 31% in June 2021.
Loser: College enrollments are trending down
College football and basketball fans are seeing powerhouse schools like UCLA and USC merge into sports conferences for the allure of bigger payouts.
Smaller schools across the country are struggling to survive. Over 200 schools have closed for good in the past decade, roughly four times higher than the prior ten years.
Overall college enrollment fell to just 16.2 million this year, from 19.6 million in the spring semester of 2011.
In order to survive, higher education is embracing mergers and acquisitions.
Boston’s Northeastern University acquired the Oakland-based Mills College, a prestigious women’s school. Mills was teetering on permanent closure.
Small private schools are failing financially as students flock to brand-name universities and cheaper state schools, or just skip college altogether.
The solution might be YouTube University: Over 10% of Americans in low-wage hourly positions have upgraded to highly-skilled tech jobs in the past two years.
They’re doing so without student loans. Major tech firms are increasingly open to cheap, highly-specified online course certifications as acceptable qualifications for new hires.
Who needs boring lectures when Google can teach you anything?