Economics
These Are The American Cities Where Rents Rose The Most
These Are The American Cities Where Rents Rose The Most
Amid a historic stretch of inflation over the last year, the cost of housing (especially…

Amid a historic stretch of inflation over the last year, the cost of housing (especially rent) has been one of the most significant pressures on household finances.
Renters in many markets are seeing increases of 20% or more as they sign new leases, and, with the nationwide rental vacancy rate at just 5.6%, renters have few alternatives to find more affordable housing.
The current state of the rental market is a product of both supply and demand, with issues compiling over time and being exacerbated since the pandemic began.
Source: Stessa
On the supply side, the US has an estimated shortage of nearly 4 million housing units. Zoning and density restrictions have made it more difficult to add housing stock in many locations, both for rentals and owner-occupied units.
With rising real estate prices, 70% of the growth of the rental market since 2009 has come from higher-income earners who might otherwise have bought a home.
Source: Stessa
And as more high earners enter or stay in the rental market, builders and developers are incentivized to provide more luxury units, which means less new stock to meet the needs of low- and middle-income earners.
Source: Stessa
The pandemic-era economy has made all of these issues worse.
Meanwhile, these are the small and midsize cities where rents have risen the most (and the least).
The spike in home values and rising interest rates are putting homeownership further out of reach for many would-be buyers, keeping more people in the rental market.
Builders and developers are also struggling to keep up with heightened demand while managing costs. Ongoing supply chain challenges have made it more time-consuming and expensive to obtain building materials, while the tight labor market has left hundreds of thousands of construction positions unfilled.
Economics
Hotels: Occupancy Rate Down 3.5% Compared to Same Week in 2019
From CoStar: STR: Weekly US Hotel Revenue per Available Room Reaches Highest Level Since July 2019U.S. hotel performance increased from the previous week, according to STR‘s latest data through May 21.May 15-21, 2022 (percentage change from comparable …

U.S. hotel performance increased from the previous week, according to STR‘s latest data through May 21.The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
May 15-21, 2022 (percentage change from comparable week in 2019*):
• Occupancy: 68.6% (-3.5%)
• Average daily rate (ADR): $151.75 (+13.4%)
• Revenue per available room (RevPAR): $104.06 (+9.5%)
*Due to the pandemic impact, STR is measuring recovery against comparable time periods from 2019.
emphasis added
Click on graph for larger image.
The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021. Dashed purple is 2019 (STR is comparing to a strong year for hotels).
Economics
“This Is A Crucible Moment” – Sequoia’s Ominous Warning To Companies On How To “Avoid The Death Spiral”
"This Is A Crucible Moment" – Sequoia’s Ominous Warning To Companies On How To "Avoid The Death Spiral"
"This is not a time to panic. It is…

"This is not a time to panic. It is a time to pause and reassess," begins the thought-provoking presentation from veteran venture capital firm Sequoia Capital.
But that's about as 'positive' as they get as the founders of the firm warn of a prolonged market downturn and urges the startups in its portfolio to preserve cash and brace for worse to come.
"We believe this is a Crucible Moment, one that will present challenges and opportunities for many of you. First and foremost, we must recognize the changing environment and shift our mindset to respond with intention rather than regret."
And in its somewhat ubiquitous historically grim outlooks (its "R.I.P Good Times" in 2008 and "Black Swan" memo in March 2020 have become legendary) don't expect a quick rescue and recovery this time.
"Sustained inflation, and geopolitical conflicts further limit the ability for a quick-fix policy solution. As such, we do not believe that this is going to be another steep correction followed by an equally swift V-shaped recovery, like we saw at the outset of the pandemic," the note said.
They argue that it will be "Survival of the Quickest"...
In particular, Sequoia urged companies to look at cutting projects, R&D, marketing, and other expenses, noting that companies should be ready to cut in the next 30 days.
"We expect the market downturn to impact consumer behaviour, labour markets, supply chains and more. It will be a longer recovery and while we can't predict how long, we can advise you on ways to prepare and get through to the other side," it said.
The founders/CEOs who face reality, adapt fast, have discipline rather than regret will not just survive, but win, noting that "It is easier to preserve cash when you have more than six months left. Recruiting is about to get easier. All the FANG have hiring freezes."
They conclude their presenttation by noting that:
"At Sequoia, we believe that the one who wins is the one most prepared."
In other words America, brace for capex cuts, hiring freezes to accelerate, and growth to evaporate.
* * *
Read the full presentation below:
Economics
Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled
Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled
A week ago, following dismal guidance by Walmart,…

A week ago, following dismal guidance by Walmart, Target indicated that it is seeing a shift in the consumer wallet away from the pandemic purchases and into reopening purchases - including apparel - and the pace of this shift caught some retailers off guard on inventory. WMT, COST, and TGT all saw their stocks fall sharply last week as investor concerns around a US consumer slowdown mounted and investors reconsidered just where, if anywhere, you can play "defense" in the current market.
But as Goldman's Chris Hussey writes today, this week, results from companies like DKS, Macy's, JWN, WSM, DLTR, and DG painted a decidedly different picture.
Deep discount retailers Dollar Tree - or rather Dollar 25 Tree - and Dollar General both posted strong results and DLTR raised top-line guidance.
Which isn't surprising: as we discussed in "Middle Class Is Shutting Down As Spending By The Rich Remains Robust" when consumers are trading down - as they are doing now due to Biden's runaway inflation - dollar stores see more business.
As a result, Dollar Tree surged as much as 20% on Thursday, the biggest intraday move since October 2020. Evercore ISI said Dollar Tree's move to a "$1.25 price point" last November from $1 “came in the nick of time" adding that "given the broad-based inflationary cost pressures, the 25% price increase drove material sales and margin upside for both the namesake division and the total company," wrote analyst Michael Montani who also said that while freight, transport, and labor headwinds are real, some of the pressure cited by Target last week was likely company specific.
The analyst concluded that the read-across from DG and DLTR is “favorable,” and it seems that the low-end consumer is “hanging in better than initially thought.” Or rather, the middle-class is getting crushed and it has no choice but to trade down to the cheapest retail outlets.
And with countless shorts having piled up and getting massively squeezed, the S&P 500 Consumer Discretionary Index today has risen as much as 5.6%, its best day since April 2020, as optimism on the health of the consumer returns following a string of better-than-expected earnings reports from retailers.
Top performers in the S5COND index include Dollar Tree, Dollar General, Norwegian Cruise, Caesars Entertainment and Carnival; the Discretionary Index is on pace for its best week since March 18, when the group climbed 9.3%; the index sank 7.4% as Walmart and Target reports spooked investors. The index is still down almost 30% YTD.
"Retail earnings are bullish.... with four blow-outs,” said Vital Knowledge’s Adam Crisafulli, referring to quarterly reports from Williams-Sonoma, Macy’s, Dollar General, and Dollar Tree. “The overall retail industry is experiencing stark changes and the market is incorrectly conflating these shifts with underlying demand weakness when the actual health of the consumer is much better than it seems,” Crisafulli says, although there are many - this website included - who wholeheartedly disagree with his optimistic view of the US consumer.
Remarkably, thanks to today’s rally, even Burlington Stores, which sank as much as 12% in premarket on disappointing results, is trading up as much as 11% and some say, the rally helped reverse the earlier tumble in NVDA shares.
The discretionary group is also getting a boost from airline operators Southwest and JetBlue, helping travel-related names, while on the economic front, better-than-expected personal consumption (for the revised Q1 GDP print). and jobless claims may be adding to the bullishness according to Bloomberg.
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