#31 Daily Financial News Round Up - Dec 1,2021
Market Snapshot
Dow Jones is up by 0.38%, S&P500 is up by 0.71%, and Nasdaq Composite is up by 0.32%.
How’s crypto-market?
Bitcoin is down by 0.35%. Shiba Inu, XRP, and Solana are the top three cryptocurrencies in the last 24 hours this week. The top 3 gainers are Polygon, Algorand and Terra. The top 3 losers are Tezos, Qtum and Monero.
What news caught my attention?
Inflation is not transitory. It might be here to stay for the next few years. The annual inflation rate is 6.2% for the 12-months ended October 2021.
Omicron brings additional volatility to the financial markets. Investors are uncertain about how to assess the impact of the omicron variant of Covid-19.
Austin has one of the hottest luxury real estate markets at the moment. The entry-level list prices hit $2.34 million, which increased nearly 33% over 2020 prices, and a 44% increase over 2017 prices. The corporate relocations of Tesla, Oracle, Apple are partly responsible for this boom. Other reasons include tech-friendly, artsy vibes that make Austin stand out from the rest of the state. It is of particular interest to note that Texas nondisclosure laws restrict public records of the home sales price. Nondisclosure of home sales price exacerbates the information asymmetry between buyers and sellers. (see below for more detail on information asymmetry).
Credit-card applications hit pandemic high. In the early months of the pandemic, credit-card applications and credit usage declined to spark the question - are credit cards dead? That question seems to have come too soon. The demand for credit is back again. 27% of consumers applied for a credit card in the past 12 months, and this number is the highest since 2019. Last year, it was 16%.
Information Asymmetry arises when one party has better or more relevant information that might put them at an advantage compared to the other party in an economic transaction. The classic example of information asymmetry used to explain information asymmetry to Econ PhD students is a used-car sale. The seller has more information about the condition of the car than the buyer does.
My Takeaways:
Consumer demand for credit is on the rise, reflecting consumer trends.
Zillow and other such apps will not be that useful to alleviate information asymmetry in home purchase decisions in Texas.
Uncertainty rises due to omicron.