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The World
Mortgage rates topped 7% for the first time in 20 years, the latest milestone in a rapid climb that has all but paralyzed the housing market. The rate on a 30-year fixed mortgage averaged 7.08% this week, according to a survey of lenders by mortgage giant Freddie Mac. Just seven weeks ago, the rate was below 6%. A year ago it was just over 3%. The last time mortgage rates were this high, the dot-com bubble had recently burst. Rates were on the way down. They were in the middle of a four-decade stretch in which they mostly fell, underpinning the growth of the modern mortgage market and boosting the rate of homeownership. (Wall Street Journal)
Treasury Secretary Janet Yellen said that she does not see any signs of recession in the U.S. economy in the near future. Her comments come in the wake of a GDP report from the Commerce Department that found the U.S. economy expanded at a 2.6% annual rate in the third quarter, ending the streak of back-to-back contractions that raised fears of a recession. (Axios)
Four of the Pentagon’s top defense contractors have warned that persistent parts and labour shortages could continue into 2024, just as they invest in accelerating weapons production and orders related to the war in Ukraine roll in. Boeing, Lockheed Martin, Northrop Grumman and Raytheon Technologies have contended with snarled supplies since the start of the coronavirus pandemic, and they are now confronting widespread cost inflation. These factors have combined to slow production rates, weigh on revenues and in some cases cause outright losses. (Financial Times)
Russian President Vladimir Putin is showing no regrets for the war against neighbor Ukraine, insisting it is going to plan and playing down any nuclear standoff with the West. Putin had a familiar litany of grievances against "our Western opponents" and said the West's dominance over world affairs was coming to an end. Putin accused the West of inciting the war in Ukraine and of playing a "dangerous, bloody and dirty" game that was sowing chaos across the world. Ultimately, Putin said, the West would have to talk to Russia and other major powers about the future of the world. (Reuters)
Russia Says It Could Target U.S. Commercial Satellites in Ukraine. (Wall Street Journal)
Beijing mayor Chen Jining in ‘surprise’ promotion to top job in Shanghai: Chen was said to have arrived in Shanghai on Thursday evening and an official announcement was made on Friday. Appointment seen as part of President Xi Jinping’s strategy to put people with strong scientific backgrounds into key roles. (South China Morning Post)
Iranian forces open fire on protesters as government buildings burn: The violence erupted in the city of Mahabad. Security forces responded by opening fire on demonstrators. At least two people were killed and dozens hurt, activists said. (Washington Post)
North Korea fires ballistic missile off east coast: Seoul. South Korea says the North has launched a ballistic missile over the Sea of Japan. Seoul has also said it believes Pyongyang is preparing to carry out a nuclear test. (Deutsche Welle)
Brazilian leftist leader Luiz Inacio Lula da Silva's lead over President Jair Bolsonaro slightly increased, just days before a Sunday runoff vote. Lula reached 49% of voter support against 44% for the incumbent Bolsonaro, compared to 49% and 45% respectively in the previous poll eight days ago. Datafolha interviewed 4,580 voters between Oct. 25-27 and the poll had a margin of error of 2 percentage points up or down. (Reuters)
Saudi Arabia’s Image in America Continues to Sink as Formal Relations Hit Nadir: After OPEC+ output cut, 53% of U.S. adults viewed the kingdom negatively, the biggest share so far this year. (Morning Consult)
Fossil fuel demand expected to peak within 15 years: The International Energy Agency finds that the war in Ukraine has accelerated the world’s transition to cleaner energy sources. (New Scientist)
Economy
Top Housing Markets This Fall Are Those With Affordable Homes: Home-buying demand remained robust in low-cost cities with strong local economies in the third quarter, helping lift Johnson City, Tenn., to the top of The Wall Street Journal/Realtor[dot]com Emerging Housing Markets Index. Rising mortgage rates have made most home purchases less affordable and pushed many buyers out of the market. Existing-home sales dropped for eight straight months through September. Homes are sitting on the market longer, and more sellers are cutting prices. Buyers’ focus on affordability benefited Johnson City. The metro area’s median listing price was $379,000 in September, up 27% from a year earlier, according to Realtor[dot]com, while median list-price growth nationwide was 14%. Johnson City’s median listing price was $48,000 below the median listing price nationwide last month. (Wall Street Journal)
American companies increasingly look outside of China after Covid: Nearly twice as many U.S. companies cut their investment in China this year versus last year, the American Chamber of Commerce in Shanghai found in its latest survey. Almost double the number of respondents redirected planned China investments to other destinations in the past year, the survey found. Most companies weren’t making drastic changes, and 30% said they planned to increase investment in China for the growth opportunity, the survey found. (CNBC)
The Bank of Japan decided to maintain its ultraloose monetary policy amid growing concerns about the outlook for the global economy. The BOJ also released inflation projections, with the mean projection rising to 2.9% from 2.3% for fiscal 2022, and 1.6% from 1.4% for fiscal 2023, in a sign that price increases are becoming more widespread than policy board members had anticipated. (Nikkei Asia Review)
Tokyo inflation hits 33-year high 3.4%. (Nikkei Asia Review)
The European Central Bank increased interest rates by a further 0.75 percentage points in an attempt to tame inflation. (The Times)
Sen. Warren says big banks fail to prevent ‘rampant’ fraud on payment platform Zelle, urges CFPB to tighten regulations. (CNBC)
Technology
Elon Musk fired several Twitter executives after completing his takeover of the company, capping an unusual corporate battle and setting up one of the world’s most influential social-media platforms for potentially broad change. Mr. Musk fired Chief Executive Parag Agrawal and Chief Financial Officer Ned Segal after the deal closed, the people said. Mr. Musk also fired Vijaya Gadde, Twitter’s top legal and policy executive, and Sean Edgett, general counsel. (Wall Street Journal)
Elon Musk pens an open letter to calm Twitter advertisers, arguing his goal is not “to make more money” and the service “cannot become a free-for-all hellscape”. (Variety)
Sources: ahead of Elon Musk's takeover, advertisers on Twitter are concerned about looser content moderation and potential conflicts of interest for car ads. (Wall Street Journal)
Apple reported a good quarter of financial results this week, earning the ebullient congratulations that analysts like to give in investor calls. But it wasn’t easy, and it could be a while before it’s repeated. Revenue climbed 8%, only slightly better than expected. When technology peers like Intel Corp. (-20%) and Meta Platforms Inc. (-4.5%) are faltering, there’s consolation in knowing at least one company can expand the top line. Its shares were down around 1% in post-market trading, following an earlier drop of as much as 5%. The tech-heavy Nasdaq composite index fell 1.6% Thursday after a 2% drop the day before. (Bloomberg)
Amazon said that revenue growth in its cloud-computing unit slowed in the third quarter to 27.5%, missing analysts’ estimates. It’s the slowest expansion since at least 2014, the year Amazon started reporting on the group’s finances. (CNBC)
Smart Links
NASA says its annual economic output is triple the agency’s budget. (CNBC)
Yuan becomes 5th most traded currency, helped by sanctioned Russia. (Nikkei Asia Review)
Bacteria could survive just under Mars's surface for 280 million years. (New Scientist)