Updated: Aug 29, 2021
It's August already, can you believe it?! So, a lot has been going on in the financial markets these days. Today, we are going to touch on a few topics that you may have heard about.
1. The Housing Boom: I KNOW you’ve heard of the recent housing boom in the past year. Demand has increased significantly and as a result, prices have soared. Prices have actually reached a new record this past May. Low interest rates and a low catalog of properties have caused quite a stir in the market, or should I say quite a shortage? I think I should. Strong demand, low supply. People are taking advantage of the current housing market and its rates, even though prices are skyrocketing. Homes are selling at much higher prices over the property asking price. Current homeowners are not selling, which is causing a low inventory. So, good luck finding a house right now!
2. Robinhood’s IPO: Before I delve into this, let me explain what an IPO is. An IPO is an initial public offering. Companies that move from privately-held ownership to public ownership place shares on the market to be bought. This past week on July 29th, Robinhood, a popular investing app began trading its shares. This was a much-anticipated IPO and all eyes were on the company’s initial performance because of the impact they have had on stock market participation. The stocks began trading at $38 and you are able to buy them on the app. This was an interesting IPO because the company allowed stocks to be owned by its users. They are now public and you can now buy ownership in the company.
3. The Federal Reserve: Some other major news this week was that the Federal Reserve wrapped up their two-day policy meeting. The committee decided to keep the target range for federal funds rate at 0%-0.25%. You can read the entire Federal Open Market Committee here. Depending on how the economy continues to progress, the central bank will begin to slow its aggressive support. But only time will tell.
4. Inflation: We spoke a little about this last week (click here to view last week's post). Consumer spending has been on the rise in recent months post-COVID. Inflation is rising. The second quarter GDP report was published this week as well and shows that consumer spending grew at 11.8%. But, because demand is greater than supply right now for a lot of products, there are more talks of the rise in inflation. Something we should continue to monitor.
That’s all we have for this week in the financial markets. To stay up to date with weekly news in the financial and economic markets, we will be posting articles on our Twitter page. Make sure to follow @TheWiseExchange. Write to you next week!