🎓💰 Guess Who’s Back
Happy Sunday all!
We have some really interesting insights on the student loans situation and the stock market as of late! We hope you enjoy this week’s Sunday Primer.
- Humphrey, Tim & Rickie
Market Report
Student Loan Payments Are Back. What That Means for Millions of Borrowers (Bloomberg)
The recommencement of federal student loan payments paused since March 2020 due to the pandemic, is set to affect over 40 million Americans with a collective debt exceeding $1.6 trillion.
This change follows a bipartisan deal addressing the nation's debt limit and a Supreme Court ruling against a Biden administration's debt forgiveness initiative.
Payments resume in October 2023, with varying due dates, and borrowers will receive their bills at least 21 days prior. The resumption is feared to lead to a potential $100 billion annual reduction in economic activity.
A 12-month "on-ramp" period through September 2024 has been introduced to shield borrowers from credit bureau reporting, default status, or debt collections upon missed payments.
Additionally, the Biden administration launched the SAVE plan, lowering payment rates on undergraduate loans, aiming to lessen the debt burden.
September stock slump shows bear market’s staying power (Axios)
After nearing a new record high, the S&P 500's 2023 gains have significantly declined in recent months, casting new doubts on the potential for a new bull market.
The market had rallied remarkably since its low point nearly a year ago, bolstered by a slowdown in inflation and consequent dip in long-term interest rates, fostering hopes for a softer monetary stance from the Fed.
This propelled the S&P 500 and Nasdaq to soar nearly 30% and 40% respectively between October and July.
However, the resurgence in inflation, driven by factors like rising oil prices due to production cuts by Saudi Arabia and Russia have reversed the fall in long-term interest rates, now at a 16-year high, leading to a 4.6% decline in the S&P 500 this month.
California minimum wage for fast food workers raised to $20 an hour (Reuters)
California Governor Gavin Newsom signed a bill ensuring a minimum wage of $20 per hour for fast-food workers, alongside enhanced workplace standard-setting provisions, effective from April.
The legislation, a leap from the state's overall minimum wage of $15.50 per hour, also introduces a "Fast Food Council" for ongoing pay and work condition evaluations.
Homes "unaffordable" in 99% of nation for average American (CBS)
A report from real estate data provider ATTOM reveals that housing affordability is a growing issue across numerous US communities, as median home prices in 99% of 575 examined counties exceed the financial reach of average income earners ($71,214 annually).
Driven by mortgage rates surpassing 7% and a dwindling home supply due to homeowners' reluctance to sell amidst high rates, the national median existing home price has risen to $407,100 as of August, a 3.9% increase from the previous year.
This particularly challenges first-time and younger buyers, while cities like Los Angeles, Chicago, and Phoenix are noted for their unaffordability. Conversely, areas around Cleveland, Detroit, and Houston offer relatively affordable homes in comparison to local median incomes.
Tesla’s Streak of Record Deliveries Hits Third-Quarter Roadblock (Bloomberg)
Tesla faces a potential end to its streak of quarterly car delivery records due to factory downtime over the summer for upgrades.
While analysts forecast a drop in Q3 deliveries, Tesla aims to maintain high sales by reducing prices, like the Model Y's cut from $65,990 to $50,490 amidst inflation and high-interest rates.
Despite the slowdown, there's anticipation for over 2 million car productions in 2024.
Amidst a broader automotive industry shift towards electric vehicles, evidenced by the ongoing UAW strike against major automakers, Tesla's delivery report is expected to push the US past 1 million electric car sales this year, a significant milestone.
Forecast Ahead
Big Number: $925 Million
The Powerball jackpot grew from $850 million to $925 million after no one matched all six numbers in Wednesday's drawing.
It's the ninth-largest U.S. lottery prize ever and fourth jackpot of 2023 to crack the top 10 list of biggest Powerball and Mega Millions prizes.