Friday, May 20th 2022

Three Things (5/20)

Commentary

“Character is the architect of achievements” – Mark Twain

1) Real estate sales slow most since the beginning of Covid

  • In April, sales of homes fell to the slowest pace since the Covid pandemic began.

  • New listings climbed sharply and the share of listings with price drops reached a 2.5-year high as early-stage homebuyer demand declined.

  • Mortgage purchase applications fell to their lowest level since May 2020.

Titan’s Takeaway: Real Estate has remained strong compared to other asset classes amidst the broader downturn, yet new data shows cracks in its resilience. Although housing prices remain elevated today, surging mortgage rates and the pull-forward of demand we've experienced over the last ~2 years could lead to a weaker outlook.

2) Apple reveals AR/VR headset at the latest board meeting

  • The headset developments come alongside robust updates to their reality operating system (rOS) to be launched alongside the new hardware product.

  • The market for AR and VR headsets grew 92% year-over-year in 2021.

  • The new product is rumored to launch at a price point of $2000.

Titan’s Takeaway: Given Google recently previewed their AR glasses and Meta has been touting a new “Cambria” Headset, the announcement does not come as a surprise. It may not be a winner take all scenario but we believe that success will be derived from a robust operating system and extensive developer access, a game Apple knows all too well.

3) Major economists cut growth forecasts for China

  • Economists at Goldman Sachs, Bloomberg, and Citi downgraded Chinese growth estimates for 2022.

  • Covid controls continue to weigh heavily on consumption and production as the stimulus is failing to gain traction due to ongoing restrictions.

  • Authorities in China have begun to revamp support as Chinese Premier Li Keqiang told local governments on Wednesday to “act decisively” in an effort to bring the economy back on track.

Titan’s Takeaway: As covid lockdowns continue across China, economists begin to weigh the long-term impact on Chinese growth and global trade. So long as lockdowns continue, China’s growth prospects will falter, requiring import reliant industries to further reevaluate their 2022 business plans.

As of this writing, AAPL, FB, GOOG were a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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