No crash here: America’s housing market is behaving oddly, according to The Economist. Economists have expected residential property prices to decline over the last few months, and have been continually surprised that prices instead remained consistent in rate of growth. The May average home price rose 4.3% from last year, which is only slightly below the average rate since the end of the housing crash a decade ago. With the rate of foreclosures unlikely to reach heights similar to the last recession, and average housing debt-to-income also lower, there may be little chance that the strong American housing market subsides anytime soon.
Food delivery deals: Uber has agreed to buy the fourth-largest U.S. food delivery service, Postmates, for $2.65 billion in stocks. The purchase comes only a month after Uber’s talks with rival GrubHub fell through. Uber already owns Uber Eats, but intends to keep the two companies separate, reports CNBC, “supported by a more efficient, combined merchant and delivery network.”
Uber is banking on food delivery to supplement company revenue from ridesharing, which saw a 80% decline in April. Alternatively, the company’s gross bookings revenue from food delivery was up more than 50% during the same period.
A negative outlook: The Bank of Canada says that business sentiment has fallen to the low levels previously seen during the 2008-2009 economic downturn, reports Bloomberg. The Ottawa-based central bank polled businesses between May 12 and June 5 to gauge sentiment during the pandemic, with the yielded results indicating that many businesses continue to struggle despite local economies reopening across the provinces. This comes as little surprise considering that the country fell into its deepest recession since the Great Depression at the onset of the pandemic.
However, businesses seem to be less pessimistic than they were during the 2008 crisis, with more than half of firms expecting sales and employment to almost fully recover within a year.
Activist campaigns are coming: Corporate clients have been warned to expect an onslaught of interest from activist investors in the upcoming weeks as many hedge funds that previously kept a low profile during the early stages of the pandemic begin to explore their options. Many activist hedge funds kept their heads down during the first half of 2020, reports the Financial Times, fearing the reputational risks of acting too aggressively during a global crisis. The ongoing economic recession has driven many businesses’ stock prices down, making them more vulnerable to external forces.