Market Updates

The FHFA House Price Index and Case-Shiller U.S. National Home Price Index both showed housing prices rising. The FHFA numbers showed a 5.5% increase year-over-year, a 2.1% gain in Q3 versus Q2 and a 0.6% gain in September. The index has seen positive gains every quarter since the start of 2012. The Case-Shiller index showed a 3.9% gain year-over-year and a 0.7% gain in September, which marked the eighth straight month of gains as the index hit another all-time high. These numbers are showing that even as housing affordability has fallen and mortgage rates have risen, prices have stayed high largely due to historically low inventory. While prices on new homes have fallen recently, for existing homes, it is still a seller’s market and potential buyers may still need to be patient until something changes.

Controversial fast-fashion company Shein filed for a U.S. IPO. The Chinese-founded company now based in Singapore is one of the largest fashion retailers and has the most-visited clothing website in the world. It has used social media and data science to revolutionize fast fashion on its way to a reported valuation as high as $100 billion, though it was last valued at $66 billion. They are reportedly targeting an $80-90 billion valuation in the upcoming IPO, which would be one of the highest initial IPO valuations of all-time. The company has faced scrutiny after accusations of using forced labor, copyright infringement and its ties to China, all of which could be roadblocks on its way to a possible 2024 public market debut.

Online banking platform SoFi shut down its crypto trading service. A spokesperson for the company said the decision was based on increasing regulation from the federal government on how banks can handle crypto. Existing customers have until December 19th to migrate their holdings to UK-based Blockchain.com, which coincidentally just announced a $110 million funding round. As the U.S. government’s requirements surrounding crypto get stricter, other players may also choose exit the market. However, for now, most U.S. investors still have plenty of options if they want to buy, sell and trade crypto.

As the private credit market grows, concerns are growing about its lack of of transparency. Two senators asked regulators this week to do more to investigate the industry and ensure that there is proper oversight. As traditional banks have been rapidly growing their private credit efforts, there are concerns that it could pose “hidden dangers to the banking system”. Elsewhere, UBS chairman Colm Kelleher warned that there is currently a private credit bubble that could trigger a new financial crisis if it pops. While private credit has become a popular way to achieve yield in the current high interest rate environment, there is always the risk of default, and Kelleher is worried that a single failure could trigger a major crash.