Instacart, the leading US online grocery delivery company, is gearing up for an initial public offering (IPO) that could value the business at up to $9.3 billion. Pricing (22 million shares at between $26 and $28 is expected be set tomorrow, Goldman Sachs are advising). This marks a substantial decline from its peak valuation of $39 billion during the height of the Covid-19 pandemic. Instacart is aiming to raise approximately $616 million through the IPO, positioning it as one of the most significant IPOs of the year, potentially signaling a rebound in the US IPO market which has choked recently. This has been the longest lull in listings since the 2009 financial crisis. The IPO pricing is seen as conservative due to the current uncertain market conditions. Instacart's strategic shift towards focusing on grocery technology over delivery is a key aspect of its IPO strategy, leveraging the consumer data it has gathered to enhance its offerings to grocery stores.
At the end of last week, Freddie Mac figures showed that the average 30-year mortgage was sitting at a whopping 7.18% - but the widely reported inventory crunch is still forcing home prices higher as owners with good mortgage rates sit tight. Here are plenty of reports to show us what the future holds for real estate prices.
The week starts with the release of the home builder confidence index. Last month saw the first fall in confidence of the year as the National Association of Home Builders reported that buyer traffic slipped. 25% of all builders cut prices to boost sales during the month.
Both housing starts and building permit figures will be released Tuesday morning – giving further data on how the Fed’s interest rate hikes are affecting the housing market. Last month’s figures showed that private housing starts in July (1,452,
000) were up 3.9% on June’s predictions, and nearly 6% up on the year prior – a similar number is predicted for the next release.
Will the Fed stick or twist? Tuesday’s figures will no doubt have some bearing on Jerome Powell’s next move, but we must surely be nearing, if not already at, peak interest on this cycle. Back in June, the Fed’s notes seemed to suggest that there were two more 25bp hikes on the way, and it was trying a 0.25% raise every other month policy. That having been said (the last raise was July) there’s no certainty of a raise this week – although last week’s core CPI figures showed an increase of 4.3 % from a year ago – well above the fed’s target rate. Most economists say that there won’t be a hike this week – but that there could be another this year.
The market is a long way from the heady low interest housing boom that saw real estate agents make commissions hand over fist. July’s existing home sales figures showed a 2.2% drop from the previous month to 4.07 million units, with the Northeast, South and Midwest taking the lion’s share of the hit. Those numbers were 16.6% down on the previous year. Thursday’s figures are expected to be fractionally higher than July’s.
The Bank of England follows the Fed by one day – and it’s widely predicted that the central bank will boost rates by 25bp – to 5.5%. Inflation is falling there – but it’s still at a hefty 6.8% - triple the BoE’s target. Although home prices are rising, they are still below the recent Nov 2022 peak – and home sales are predicted to be the lowest for a decade.
Bank of Japan Governor Kazuo Ueda’s recent comments have supercharged 10-year government bond yields to a 9-year high as speculation rises that he may raise rates rapidly to end Japan’s experiment with negative interest rates. The BoJ cut rates to try to force inflation UP to 2% - it hit that target 18 months ago. Even with low yields, the Japanese market has been a darling of investors this year – it’s 22% rise to three decade highs makes it the best-performing major index this year.
Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.
Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.
Asset managers are racing to bring private market products to retirement plans, but cost and liquidity concerns linger.
Treasury's latest tax-exemption crackdown on private schools lands in the wake of a separate push to restrict refundable credits for some immigrant filers.
Workforce trust measures predicted which companies came out ahead during COVID-19. The same dynamic may now be playing out across the AI transition — and the data suggests the spread could be just as wide.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
