Tuesday's Final Takeaways: Chinese Stocks See Pressure & Existing Home Sales Slide

**Marley Kayden** (0:00)
And we're going to wrap up our show with our final thoughts on this session today. For me, of course, we got existing home sales this morning, falling for a second straight month in July, dropping 1.7 percent to a seasonally adjusted annual rate of 4.06 million, as these higher mortgage rates kept buyers on the sidelines. Sales were still up about 7 tenths of a percent from a year ago, but the median home price rose about 2 percent, that keeping affordability a major hurdle. Mortgage rates climbed to around 6.7 percent, while Limited Inventory is also keeping a lid on these transactions, with just 4.6 months of supply right now in the market. The housing market does remain stuck in this affordability squeeze. Experts and economists alike saying that the path for sales to meaningfully rebound will likely depend on mortgage rates coming down.
Also, this story was one of my favorites on the day. Private equity giant Apollo Global Management is making waves today after securing a landmark $2.6 billion strategic financing deal with Yankee Global Enterprises. Yes, the New York Yankees. The hybrid credit and equity transaction marks Apollo's largest US sports investment to date, giving its new sports platform direct backing from Major League Baseball's most valuable brand. While the Steinbrenner family retains full operational control of the Yankees, the deal does provide YGE with massive capital to refinance its debt and fuel growth across its media and stadium assets. Apollo's stock is one of the top performers on this session, as investors are cheering high yielding exposure to a premier trophy asset. And this is an unprecedented first of its kind transaction that could set a new template for how sports mega cap structure their debt and capital going forward. It's also a pivot from the usual minority stake that's taken by private equity. Additionally, it also marks the largest single capital deployment by a private asset manager in US sports history. Sam, so a big day for sports and PE.
What caught your eye on the session though?

**Sam Vadas** (1:57)
Yeah, here we were thinking it was all Jensen Huang, but obviously it was the New York Yankees as well.
Chinese ADRs had a tough day. K-Web, Barber, Neo, JD all down. We did get some weaker car sales numbers out of China overnight, which showed a 10th straight month of declines, although the pace at the drop eased and export growth held up nicely, which shows these companies overseas sales are making up for softer demand and competition at home. Chinese stocks rallied yesterday, so perhaps some profit taking ahead of key earnings this week. I spoke to Michelle Gibley about this rotation back into Chinese stocks. She points out that half of the earnings in the EM index is coming from South Korean memory name. So if we get any slowdown there, she says we're going to need a big turnaround in Chinese profits to boost the overall index. And as for US corporate earnings, well, I also asked Lizanne Saunders about just how high the bar has now been set for Q3 earnings. We still have NVIDIAs, of course, and a bunch of retailers set to report, which she says is the blended growth rate, which is the combination of all those companies that have reported, including the stragglers. She highlights how better or worse often matters more than good or bad, meaning it's the direction of travel that's important here, because there is a risk that if you set the bar so high, the market does start to sniff out an inevitable inflection point where you start to see a deceleration at earnings. Not saying that that's gonna happen this time around, but something to keep in mind. But heading into tomorrow, Marley, what are you gonna be looking out for?

**Marley Kayden** (3:27)
I can probably guess. You can, it's that inflation print that we're getting tomorrow morning. We're gonna be looking at CPI at 830 Eastern. Expecting CPI to rise about a tenth of a percent month over month. Core CPI expected to rise a little bit more than that after an unexpectedly soft June reading. Obviously closely watched here for any clues on the Fed's next move, particularly after last week's weaker jobs report. If it comes in hotter than expected, it could put some renewed pressure on yields. Also reinforce the case for higher for longer, or even up the odds for a hike. But how about you, Sam? I'm guessing it's earnings.

**Sam Vadas** (3:57)
Yeah, earnings obviously. We've still got a few names that are set to report. Some big ones like Cisco, that's going to be obviously a good indicator. Coherent, we've obviously just had Lamentum, so that could be a bit of a clue there. So Rebus, and as I mentioned, we've got some Chinese ADR set to report as well. Looking at 10 cent tomorrow in the market, Marley.