| | | | | | | | | | | Axios Markets | | By Emily Peck and Matt Phillips · Sep 08, 2022 | | Hey everybody, and happy Thursday to you. Here's the newsletter, edited by Kate Marino — 1,028 words and a 4-minute read. | | | | | | 1 big thing: Why so-called zero-down mortgages are gaining ground |  | | | Illustration: Maura Losch/Axios | | | | You can expect more lenders to offer mortgages like Bank of America's recently announced "zero down payment" loan for first-time homebuyers, but there's one thing to understand right off the bat — the moniker is a misnomer. Bank of America's mortgages do require a down payment, Emily writes. What's happening: As part of an effort to close the racial and ethnic homeownership gap, BofA is offering grants of as much as $15,000 to cover the cost of a down payment to first-time homebuyers in predominately Black and Hispanic neighborhoods in five metro areas (Charlotte, Dallas, Detroit, Miami and Los Angeles) who meet certain income requirements. - So while the buyers don't have to come up with the down payment, they are not borrowing the entire cost of the home. They wind up holding some measure of equity right off the bat.
- That's distinct from the zero-down loans that, along with questionable underwriting standards, helped make such a mess in the run-up to the Great Recession.
Why it matters: Two other banks, JPMorgan Chase and TD Bank, offer similar programs that if adopted widely in both the public and private sector — and so far they haven't been — could truly make a dent in the racial homeownership gap. - "There are a handful of banks that are interested in this," says Liam Reynolds, a research assistant at the Urban Institute. He co-wrote a piece about these types of programs in February.
- If the programs proliferate, "then they do have the ability to actually make a meaningful dent in the homeownership gap," Reynolds tells Axios.
Why now: The programs are gaining traction now partly because of the renewed focus on racial equity coming out of the protests of 2020 and because of the White House's support, Reynolds says. - "It has certainly helped that the administration has encouraged them so much," he adds.
BofA also has a separate and very similar program launched in 2019, which offers down payment grants in 69 markets across the country. - That grant program, which has stricter criteria than the bank's latest offering announced last week, lent out more than $9.5 billion in mortgages in total, helping 36,000 people.
- That sounds big, but consider that the bank lent out $14.5 billion in mortgages over just three months this year.
State of play: These programs allow lenders to focus on neighborhoods that have predominantly Black or Hispanic residents. - The banks use what's called a special purpose credit program (SPCP), a policy made possible by the 1974 Equal Credit Opportunity Act, that actually permits lenders to discriminate in order to help disadvantaged borrowers.
- Federal regulators across several agencies have issued guidance on SPCPs over the past year or so, encouraging their use.
Go deeper. |     | | | | | | 2. Catch up quick | | 🇬🇧 New British PM Liz Truss announces cap on energy bills to combat the cost-of-living crisis. (CNBC) 💸 Opponents of California's fast-food wage law begin efforts to block it. (WSJ) 🚢 Temporary floating natural gas terminals are setting up in a Dutch port, the first of many that will help Europe import more gas from overseas. (Bloomberg) | | | | | | | | 3. More U.S. gas arrives in Europe |  Data: Rystad Energy; Chart: Axios Visuals Europe is entering the most treacherous terrain yet in its bid to move away from Russian energy — and the U.S. can only provide limited help, for now, Axios Generate co-author Ben Geman writes. The big picture: In March, the U.S. and EU announced an agreement for additional stateside natural gas shipments to the continent this year and a major rise through 2030. - That near-term target seems fairly easily achievable — in no small part because the U.S. shifted much of its Asia exports over to European customers, as the chart above shows.
Yes, but: The U.S and EU face physical constraints that put a ceiling on how much more the near-term supply can keep growing. - The U.S. is basically using all of its available capacity to liquefy natural gas — a process necessary to ship gas overseas — while Europe also has limited infrastructure to actually accept the imports.
What to watch: Greater competition for U.S. natural gas cargoes could loom, Anna Mikulska, an expert in gas markets and geopolitics, tells Axios. - Last winter, mild weather in Asia reduced heating demand and helped enable more flows to Europe — and this winter could be different, she says.
Go deeper. | | | | | | | | A message from Axios | | For you, your team or your company | | |  | | | | Axios Pro Corporate Subscriptions are here, with special pricing, dedicated account management and on-demand support for your employees. - Speak with our team, and we'll build you the best plan for your organization.
Learn more. | | | | | | 4. Analysts expect stocks to hit new lows |  Data: FactSet; Chart: Axios Visuals As the summer rally sputters, top Wall Street analysts expect new lows for stocks, Matt writes. Why it matters: The S&P 500 is already on track for its worst year since 2008, but these analysts suggest things may get much worse. - The S&P 500 is already down 16.5% in 2022.
- The Nasdaq is down nearly 25%.
Context: Technically, the S&P 500 has been in a bear market since its Jan. 3 peak of 4,797, after which it fell nearly 24% before seeming to hit bottom in June and rebounding. What they're saying: "We do not think the bear market is over," Morgan Stanley analysts wrote in a note this week. - The analysts think the S&P — currently hovering around 3,980 — likely falls at least another 15%, to 3,400, during the fourth quarter.
- The index could even collapse by 25%, falling to 3,000, if the economy slips into a recession, they added.
Meanwhile, Goldman Sachs stock market analysts called the June to August rally, in which the S&P rose more than 17%, a "bear market rally," in a note published yesterday. - "We expect further weakness and bumpy markets before a decisive trough is established," they wrote.
The bottom line: You might want to start averting your eyes from the old 401(k) statement again. | | | | |  | | | | If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. | | | | | | | | 5. Charted: Dining out surpasses 2019 |  Data: OpenTable; Chart: Axios Visuals Dining out is back to pre-pandemic levels and then some, according to new data from OpenTable, Emily writes. Why it matters: While the fight rages on over going back to the office, other areas of our lives have returned to something like normal. What's happening: The number of people dining in restaurants in the U.S., who reserved on OpenTable in August and September, was higher than in the same months in 2019. | | | | | | | | A message from Axios | | For you, your team or your company | | | | | | | | Axios Pro Corporate Subscriptions are here, with special pricing, dedicated account management and on-demand support for your employees. - Speak with our team, and we'll build you the best plan for your organization.
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