Home building activity takes hit in May
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Good afternoon. Today is Wednesday, June 18th. I'm your host for today, Rena Sherbel, filling in for Kim Kahn. Our top story so far, home building activity plunged last month with groundbreaking on new homes falling to the lowest level since 2020. Housing starts tumbled 9.8% to an annual rate of 1.256 million in May, well below the 1.35 million consensus and

and down from 1.392 million in April. Single-family starts in May were at a rate of 898,000, down 2.7% from the revised April figure of 923,000. Authorizations of units and buildings with five units or more were at a rate of 444,000 last month.

Building permits, a measure of future demand, fell 2% to a rate of $1.393 million last month from $1.422 million in April. That was short of the $1.42 million expected. Treasury yields paired gains right after the number hit on concerns of housing-led economic slowdown, but the moves were muted ahead of the Fed announcement this afternoon.

Pantheon macro economist Oliver Allen says the plunge starts was, quote, mostly due to a near 30 percent collapse in multifamily starts that will probably unwind over the next month or two. Confidence among homebuilders has collapsed recently, way down by relatively weak home sales and mounting inventory, suggesting that further declines in new single family construction probably lie in store, end quote.

Among active stocks today, Netflix is making its foray into the world of live TV. The streaming giant and French TV network group TF1 have struck a deal through which Netflix members in France will be able to watch TF1 channels. Through the distribution partnership, TF1's live channels and on-demand content will be available to Netflix account holders in France as

As part of their existing subscription, the companies said they did not disclose if there would be a separate charge for accessing the TV channels on the platform.

Marvel Technology has seen some buying after analysts heaped praise on the announcements made at the company's custom AI event. Morgan Stanley analyst Joseph Moore noted the company upped its financial targets and said management had, quote, significant positive commentary about new longer-term opportunities in AI.

Oracle snagged a street-high price target of $250 from Guggenheim analyst John DeFucci, who boosted his number from 220 and reiterated his buy rating. He said, "...we believe Oracle is on the precipice of a narrative shift that has been decades of technology innovation in the making."

While the timing of bookings and capacity coming online is less certain, we believe it's clear that revenues will likely accelerate in a big way in fiscal year 26 and 27, and operating income and EPS should follow suit.

In other news of note, Chinese AI startup Minimax is considering an IPO in Hong Kong. Minimax is one of China's new AI tigers or dragons and is valued at about $3 billion. Bloomberg says the company could aim to list as soon as this year. The company, backed by Chinese e-commerce and tech giant Alibaba and gaming company Tencent, has hired financial advisors for the IPO. Bloomberg said the discussions are ongoing and

and details like valuation and timing could change. On Tuesday, Minimax claimed that its new model, Minimax M1, outdoes all closed-source competitors from China in complex scenarios for productivity. M1 also scored higher than DeepSeek's R10528 model. And in the Wall Street Research Corner, Bank of America's monthly survey of fund managers is out, and June's responses show that global trade wars are still the biggest contenders.

concern. Asked what the biggest market tail risk is, 47% of money managers said a potential trade war. But while it's still in first place, it was down sharply from the 80% in May. Following closely behind are concerns over inflation-driven interest rate hikes by the Fed at 17%, an accredited event caused by a disorderly spike in bond yields,

at 16%. Among the most crowded trades, Long Gold took the top spot at 41%. Trailing Gold is being long the Magnificent Seven, which came in as the second most crowded trade at 23%. Below that is being short the US dollar at 20%. Strategist Michael Hartnett noted that fund managers haven't been this pessimistic on the greenback in 20 years, with a net negative 35% of respondents overweight the dollar.

Tomorrow, the market's closed in honor of Juneteenth, but Kim Kahn will have a special Fed deep dive on the announcement that's coming later today. Be sure to check that out. That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com slash WSB. And for a full suite of news, analysis, ratings, and data on stocks and ETFs, go to SeekingAlpha.com slash subscriptions.