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Ford and General Motors are set to report earnings this week.
Automakers have reported record results amid a tight supply of new vehicles and strong demand.
Ford cut prices on its electric Mustang Mach-E, weeks after EV leader Tesla slashed its own prices.

Attendees view a Ford Mustang Mach-E GT during opening day of the 2022 New York International Auto Show (NYIAS) in New York, on Friday, April 15, 2022.
Jeenah Moon | Bloomberg | Getty Images

DETROIT – Let’s talk about pricing power.
At least, General Motors and Ford Motor likely will be doing that this week as they report fourth-quarter results and 2023 guidance, with Wall Street watching for signs of weakening consumer demand and a tougher pricing landscape.

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Either issue would mean lower profits this year for the automakers, which are expected to report relatively solid fourth-quarter results over subdued year-ago earnings. GM is expected to report fourth-quarter earnings per share of $1.69, a 25% increase over the year-ago period, while Ford is expected to report EPS of 62 cents, more than doubling the 26 cents it posted a year earlier, according to Refinitiv consensus estimates.
Automakers have reported record results in recent years amid the tight supply of new vehicles and resilient consumer demand. They have banked on sustained pent-up demand as inventory levels normalize, hoping to avoid heavy discounts or incentives to move vehicles.
But that scenario is slowly neutralizing. And that leaves new vehicle prices and profits in flux.
Cox Automotive reports the Detroit automakers have among the highest inventory levels in stock in the industry, noting vehicle numbers differ greatly by brand. Plus, incentives are slowly rising.
There’s overall concern that the pent-up demand was largely eroded amid recessionary fears and affordability issues resulting from rising interest rates and record-high prices of nearly $50,000 on average for a new vehicle.

Ford on Monday cut the starting prices on its electric Mustang Mach-E, weeks after electric vehicle industry leader Tesla slashed its own prices.
Duncan Aldred, head of GM’s GMC brand, signaled the truck and SUV brand expects to continue increasing its average transaction price, which he said hit a new record of more than $63,405 during the fourth quarter.
Those rising transaction prices are due in part to redesigned pickups and the launch of the electric Hummer SUV, which tops more than $110,000. GM started production of that SUV this week at a plant in Detroit, the company said during a media roundtable Monday.
GM is scheduled to report its results Tuesday before markets open, followed by Ford after the bell Thursday.

‘Demand destruction’ watch

Wall Street has been bracing for a “demand destruction” scenario for the last several quarters, which means much of its focus this week will be on the automakers’ 2023 guidance.
Goldman Sachs said it expects the forecasts to be below consensus, “driven by price and mix as well as lower financial services profits.”
GM is expected to guide toward a roughly 20% decline in adjusted earnings per share for the full year 2023, according to Refinitiv estimates. Ford’s 2023 EPS is expected to fall by nearly 16% compared with 2022.
“We estimate GM and Ford could see a notable decline in profitability this year, as earnings can be weighed down by vehicle pricing declines and losses from growing EV volumes,” Deutsche Bank analyst Emmanuel Rosner wrote in an investor note earlier this month.
Rosner said that guidance risk is already well anticipated and shouldn’t dent the stocks, however.
Morgan Stanley’s Adam Jonas expects the deteriorating pricing, lower-cost vehicle mix and declining earnings from automakers’ financial arms to “potentially initiate restructuring and cut ‘special projects’ to defend the bottom line,” he said in a note to investors last week.
Amid persistent recessionary fears, automakers have yet to announce substantial layoffs or cost cuts similar to those that have hit other sectors, particularly tech, hard. Wall Street will be eager for an update on those fronts this week.
Ford reportedly plans to cut up to 3,200 jobs across Europe and move some product development work to the United States, Germany’s IG Metall union said last week. GM, which sold its European business in 2017, has not announced such actions.
GM and Ford have said they will continue to invest in EVs regardless of macroeconomic factors. Any change in those plans would be notable for investors as well.
— CNBC’s Michael Bloom contributed to this report.

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JetBlue pilots would get 21.5% raises over the next 18 months under a new contract.
Spirit pilots approved a new contract weeks earlier, and the two carriers have planned to merge.
Airline pilots have sought better schedules and pay after the Covid slump reversed.

A JetBlue passenger jet (Embraer 190) taxis at LaGuardia Airport in New York, New York.
Robert Alexander | Archive Photos | Getty Images

JetBlue Airways pilots have approved a contract extension that comes with 21.5% raises over the next 18 months as the industry reverses slow progress in labor deals during a pilot shortage.
JetBlue last year reached a deal to acquire budget carrier Spirit Airlines. That airline’s pilots approved a new two-year contract that their union estimated to be worth around $463 million. If the merger isn’t approved by regulators, the union will go back into contract negotiations with the airline.

“We entered into these negotiations recognizing that mergers take time and our pilots couldn’t wait for the compensation improvements they have earned,” Capt. Chris Kenney, who chairs the JetBlue arm of the Air Line Pilots Association, said in a statement.
Ninety-five percent of JetBlue’s pilots participated in the vote and 75% of them approved the contract, ALPA said.
Many negotiations between airlines and labor unions have been fraught as pilots seek higher pay and better schedules after the pandemic slump gave way to a travel boom. A shortage of aviators and high demand from airlines large and small have also limited airlines’ ability to grow.
Delta Air Lines’ 15,000 pilots are reviewing a contract proposal that includes pay increases of 34% over four years. If approved, that would be the first large U.S. airline to reach a deal with pilots.
United Airlines, American Airlines and Southwest Airlines are still in talks with their pilots’ labor unions.

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A trial over unpaid Cuban sovereign debt enterted its second week at the UK High Court.
The debt dates back to the 1980s, when Fidel Castro still ruled Cuba.
If it loses, Cuba could be on the hook for billions of dollars more.

Cuba’s Rodolfo Davalos arrives at the High Court in London, Thursday, Jan. 26, 2023. The Cuban government and an investment firm are battling in a British court over decades-old debts racked up by the communist-run island nation.
Kin Cheung | AP

Illegally recorded videos, chaotic protests and testimony from an imprisoned Cuban bank official marked the first week of a high-stakes trial in the UK High Court between Cuba and an investment fund.  
The fund has sued Cuba over tens of millions of dollars’ worth of unpaid commercial loans from the 1980s, when Fidel Castro was still ruling the island. The debts are so old they are denominated in German Deutsche Marks, a currency replaced by the euro in 2002. If Cuba loses, it could end up costing the nation billions.

The fund’s representatives testified in court on Wednesday and said repeatedly that they did not want to litigate, but that it was a “last resort” after the Cuban government ignored repeated requests to negotiate for a decade.
“For CRF, litigation is unattractive,” the fund’s chairman, David Charters, said Thursday, the fourth day of the trial. “It’s slow, it’s expensive, it’s time-consuming. But if it’s the only way to get the other side to the table, then you have to go down that route.”
The trial is seen as a test case. CRF1, formerly known as the Cuba Recovery Fund, owns more than $1 billion in face value of European bank loans extended to Cuba in the late 1970s and early 1980s, which Cuba defaulted on in 1986. 
CRF1, which began accumulating the position in 2009, is suing Cuba and its former central bank over only two of the loans they own for more than $70 million dollars. If CRF wins on this small slice of Cuba’s total outstanding commercial debt, estimated at $7 billion, it could lead to further lawsuits from other debt holders, with claims against Cuba rising into the billions.
The Cuban team has argued in pretrial court filings and during the trial that the debt was not lawfully transferred or “reassigned” to CFR, which is registered in the Cayman Islands, and has focused on technical aspects of Cuban law arguing that CRF does not have the right to sue Cuba based on Cuban law.

The scene at the court 

The trial, which started a week ago, is expected to last until Thursday. Neither representatives for CRF nor the Cuban government responded to interview requests. Once the trial is over, a judgement is expected in two to four months.
 It has drawn so many attendees, including press, the judge ordered a second courtroom opened, equipped with a video monitor, to handle overflow.
At least four people recorded videos in the overflow room and posted them online, drawing rebukes from the judge, Sara Cockerill. Recording proceedings in the high court is a violation of UK law. Cockerill demanded more than once that the videos be removed from social media and ordered those who had posted them to appear in court to apologize, or else they’d be charged with contempt of court.
By Wednesday, a frustrated Cockerill said if there were any further breach of the rules regarding recordings, she would shut down the overflow courtroom and force anyone who wants to watch the proceedings “to sit on the floor in here.”
Adding to the intrigue: a court attendee who’s a dead ringer for Raul Castro’s son and Fidel Castro’s nephew, Alejandro. Cuban officials say the man is just a press officer for the Cuban Embassy in the UK.
Outside the courthouse, Cuban exiles protested and shouted “asesinos” and “cobardes” (Spanish for “killers” and “cowards”) each time the Cuban government’s representatives and legal team entered or left the building.

Debt in distress

Defaulted sovereign debt, like that of Cuba, trades on the secondary market.  “Distress” investors specialize in buying unpaid debts at a discount to face value and then negotiating with the government in question to settle them, usually for a portion of the principal and a portion of the past due interest. Many countries have been through debt restructurings, from Greece to Nicaragua to Iraq.
In a CRF investor presentation from 2009, used as evidence during the trial, the fund wrote, “Historic restructurings of emerging market debt point to potential returns of 100% – 1,000%.”
In court testimony, a CRF representative said, “the whole strategy” of the fund was based on President Barack Obama’s election in 2008 and Obama’s desire to work toward ending the decades-long U.S. embargo against Cuba, imposed during the Cold War.  
When Obama and then-Cuban President Raul Castro announced a thawing of relations in 2014, Cuban debt temporarily shot up to 30-35 cents on the dollar, after trading at 6-8 cents for decades, a CRF representative testified Wednesday.
But the investment thesis did not work out. Despite numerous diplomatic efforts from the Obama administration, the Cuban government expressed little interest in any U.S. commercial presence or investment on the island.
After Obama’s historic visit to Cuba in 2016 there was a harsh crackdown on political dissent.  The embargo did not end, and many of the relaxations announced under Obama were rolled back under President Donald Trump.

What Cuba argues

According to court filings and testimony, CRF sent several letters to the Cuban government and offered Cuba a “debt-for-equity swap” — not uncommon in debt restructurings involving countries with little cash on hand. In such a deal, the creditor receives a concession to, or ownership of, a government-owned property such as an airport or a port. Creditors then invest in the asset and receive a portion, or all, of the revenues generated by the asset.
Some of the most dramatic and combative testimony came from Raúl Olivera Lozano, a former official from the Banco Nacional de Cuba, now serving a 13-year prison sentence in Cuba. He was convicted for agreeing to accept a bribe of 25,000 pounds in exchange for signing paperwork which allowed the debt in question to be transferred to CRF, which then allowed the fund to sue Cuba.
But Olivera Lozano says he never got paid. “I did that document because I expected economic benefits and the money,” he testified via videolink from Cuba, adding that the CRF representative “did not comply with that, and I found myself having been used by this gentleman,” referring to Jeet Gordhandas, a CFR representative.
CRF has maintained the accusations of bribery are “scurrilous” and were falsified by the Cuban government solely to justify not paying the debt.
While it may be dramatic, the bribery allegation is not a core part of the Cuba defense. Instead, the government’s lawyers have focused on legal interpretations of Cuban statutes, improper paper work and whether CRF could rightfully sue the Cuban government
Even though Cuba’s defaulted debt is nearly 40 years old, there’s a precedent for bondholders waiting even longer. More than 300,000 holders of czarist-era Russian bonds, which the Bolsheviks defaulted on in 1917 after the revolution, received payment in 2000.
Because of the U.S. embargo against Cuba, American investors are prohibited from owning and trading Cuban debt, which frustrates some frontier-market hedge fund managers in the U.S. They argue that holding Cuban debt would better serve U.S. foreign policy interests because it would give Americans a seat at some future negotiating table.
Beyond the European commercial debt, there are still nearly 6,000 American claims outstanding from individuals and companies whose properties were confiscated by the Castro government in the 60s.
John Kavulich, the head of the U.S.-Cuba Trade & Economic Council, is closely following the trial on behalf of American companies with claims still outstanding.
“This has not been an elegant spectacle,” he said. “Companies and financial institutions are watching, and thus far the message they have received from the lawsuit and the trial is to avoid Cuba.”

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Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Monday’s key moments. Stick to Dow stocks Watch wage inflation Monitor Ford price cuts 1. Stick to Dow stocks The S & P 500 and Nasdaq Composite fell on Monday ahead of a jam-packed week of earnings and an expected interest rate hike from the Federal Reserve. At the same time, the Dow Jones Industrial Average inched up 0.04% in midmorning trading. Monday’s mixed session is a reminder that investors should stick with high-quality, recession-resistant stocks in the Dow , while steering clear of show horse names in the tech-heavy Nasdaq. Among Dow stocks, we are specifically bullish on Club holding Procter & Gamble (PG). 2. Watch wage inflation When the U.S. Department of Labor releases it January non-farm payrolls report on Friday, we’ll be looking for signs that wage inflation is abating. That could allow the Federal Reserve to slow the pace of interest rate hikes in the coming months. Jim Cramer maintained Monday that the Fed should be able to limit the impact of an economic slowdown, even if it has to inflict more sort-term pain on markets. “They will engineer a soft landing – I reiterate, they will engineer a soft landing,” Jim said. 3. Monitor Ford price cuts Ford Motor (F) on Monday said it is lowering prices on its electric Mustang Mach-E crossover , while ramping up production. The move, which comes on the heels of similar price cuts by electric vehicle maker Tesla (TSLA), means not all Mach-E models will be profitable on a per-unit basis. We don’t have any plans to trade the stock as of now and are keeping an eye on the situation. Ford is set to report fourth-quarter earnings on Thursday. (Jim Cramer’s Charitable Trust is long PG, F. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

WHO chief Tedros Adhanom Ghebreyesus said Covid remains a global health emergency, though the world is in a much better place than it was a year ago.
The WHO has estimated that at least 90% of the world’s population has some level of immunity to Covid due to vaccination or infection.
The WHO chief has previously said the end of the pandemic is in sight.

Director-General of the World Health Organisation (WHO) Dr. Tedros Adhanom Ghebreyesus attends an ACANU briefing on global health issues, including COVID-19 pandemic and war in Ukraine in Geneva, Switzerland, December 14, 2022. 
Denis Balibouse | Reuters

The World Health Organization on Monday said Covid-19 remains an global health emergency as the world enters the fourth year of the pandemic.
But WHO Director-General Tedros Adhanom Ghebreyesus said he was hopeful that the world will transition out of the emergency phase of the pandemic this year.

“We remain hopeful that in the coming year, the world will transition to a new phase in which we reduce hospitalizations and deaths to the lowest possible level, and health systems are able to manage Covid-19 in an integrated and sustainable way,” Tedros said in a statement.
The WHO’s emergency committee met on Friday and advised Tedros that the virus, which was initially discovered in Wuhan, China in late 2019, remains a public health emergency of international concern, the U.N. agency’s highest alert level. The WHO first declared an emergency in January 2020.

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The WHO decision comes after the U.S. earlier this month extended its public health emergency until April.
In his statement Monday, Tedros said the world is in a far better place than it was a year ago when the omicron variant first swept the globe. The WHO has estimated that at least 90% of the world’s population has some level of immunity to Covid due to vaccination or infection.
Weekly Covid deaths have dropped 70% since the peak of the first massive omicron wave in February of last year, according to WHO data. But deaths started increasing again in December as China, the world’s most populous country, has faced its largest wave of infection yet.

Tedros on Friday said surveillance and genetic sequencing has declined dramatically, making it difficult to track Covid variants and detect new ones. Too few older people are fully vaccinated and many people do not have access to antivirals, he said.
“Do not underestimate this virus,” Tedros told reporters at press conference in Geneva on Friday. “It has and will continue to surprise us, and it will continue to kill unless we do more to get health tools to people that need them and to comprehensively tackle misinformation.”
Last month, the WHO chief said the end of the emergency phase of the pandemic is closer than ever before. In the fall, Tedros said the end of the pandemic was in sight.
“We have never been in a better position to end the pandemic. We are not there yet but the end is in sight,” Tedros told reporters in Geneva last September.

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The Detroit automaker is increasing production and cutting prices on its electric Mustang Mach-E crossover.
Tesla previously announced similar plans for its EVs.
The price cuts mean not all Mach-E models will be profitable on a per-unit basis, according to a Ford executive.

People visit Ford’s all-electric SUV Mustang Mach-E at the 2019 Los Angeles Auto Show in Los Angeles, the United States, Nov. 22, 2019.
Xinhua via Getty Images

DETROIT — Ford Motor is increasing production and cutting prices of its electric Mustang Mach-E crossover, weeks after industry leader Tesla announced similar plans for its EVs.
The Detroit automaker said Monday it will lower pricing of the Mach-E, which is comparable to Tesla’s Model Y, by an average of about $4,500, depending on the model. The reductions range from $600 to $5,900, compared with Tesla’s price cuts of up to $13,000 on its Model Y earlier in January.

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Wall Street analysts and investors largely applauded Tesla’s price reductions as a way to drum up demand and increase sales, despite concerns the move would erode some profits. Analysts expected Tesla’s cuts to put pressure on other automakers to cut their own prices.
In Ford’s case, the price cuts will mean not all Mach-E models, based on the trim, will be profitable on a per-unit basis, according to Marin Gjaja, chief customer officer of Ford’s electric vehicle business. He said Mach-E production is expected to increase from 78,000 vehicles to 130,000 units annually.
“We are responding to changes in the marketplace,” Gjaja said during a media briefing, referencing new federal EV incentives and Tesla’s price cuts. “As we look and want to stay competitive in the marketplace, we’re having to respond.”

Ford expects to offset some of the profit shrink with cost improvements thanks to the additional production as well as a reduction in some commodity costs, according to Gjaja. The Mach-E’s starting price will now range from about $46,000 to $64,000. Tesla’s Model Y starts at about $53,500 to $57,000, without any options.
The Mach-E led Ford to become the second-bestselling automaker of EVs last year in the U.S., albeit trailing Tesla by a wide margin. Ford sold more than 65,000 EVs in the U.S. last year. Motor Intelligence estimates Tesla, which does not report sales by region, sold more than 522,000 EVs in the U.S. in 2022.

Ford said existing Mustang Mach-E customers awaiting delivery of their vehicle will automatically receive the adjusted price. For customers who bought one of the vehicles after Jan. 1, and who have already received their Mustang Mach-E, Ford will reach out with a “private offer,” the company said.
In addition to the adjusted pricing, Mustang Mach-E vehicles ordered between Jan. 30 and April 3 will be eligible for special rates with Ford Credit, as low as 5.34%.
Ford declined to comment on which Mach-E trims and models would be profitable after the price cuts. The company is expected to begin separately reporting financial results for its electric vehicle business, known as Model e, later this year.
“We want to make money. Don’t get me wrong, we absolutely want to make money,” Gjaja said. “Believe you me, I know that we need to be trying to get more profitable because we will be publicly accountable for that number.”
To increase Mach-E production, Ford is upgrading the plant in Mexico where the vehicles are made. It is expected to come back online next month, Ford said.

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5 Things to Know

January’s stock rally faces big tests this week.
Apple, Amazon and McDonald’s will report earnings in the next few days.
Renault and Nissan restructure their long-held partnership.

Traders on the floor of the NYSE
Source: NYSE

Here are the most important news items that investors need to start their trading day:

1. Rally faces tests this week

The January rally has hung in there, weathering a mixed bag of earnings reports and forecast cuts, as well as some soft economic data. This week it will run into some big tests, given the earnings schedule dominated by big tech names (more on that below) and the Federal Reserve’s next moves. The Fed’s policy-setting committee meets Tuesday and Wednesday. Market watches expect the Fed to raise its benchmark rate by a quarter of a point, which would be smaller than the past few increases, so most of the focus will be on what Chairman Jerome Powell says about the Fed’s outlook following the announcement Wednesday. Read live markets updates here.

2. Apple and Amazon lead earnings slate

Tech stocks on display at the Nasdaq. 
Peter Kramer | CNBC

Some huge tech names are due to report earnings this week, but there are some big companies from other segments set to announce, as well. So far this earnings season has been mediocre at best, with several companies topping low expectations, while others have pre-announced to set expectations even lower. Here’s a look at the earnings week ahead:

Tuesday: General Motors, McDonald’s, UPS, Pfizer, Spotify (before the bell); Snap, AMD (after the bell)
Wednesday: Peloton (before the bell); Meta (after the bell)
Thursday: Apple, Alphabet, Amazon, Ford, Starbucks, Qualcomm (after the bell)

3. Renault aims to cut Nissan stake

Renault and Nissan automobile logos are pictured during the Brussels Motor Show on January 9, 2020 in Brussels. (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)
Kenzo Tribouillard | Afp | Getty Images

Two automotive titans are attempting to shake things up as the industry moves more aggressively into electric vehicles. France’s Renault and Japan’s Nissan have agreed to restructure their agreement, which they struck in 1999. Under the deal, which requires approvals from their respective boards of directors, Renault would cut its holdings in Nissan to 15% from 43%, distributing a large chunk to a French trust that would have “neutralized” voting rights. Nissan also agreed to invest in Ampere, which is Renault’s electric vehicle business. The two will also work on “high-value-creation operational projects” in Latin America, India and Europe, they said.

4. Walmart presses its advantages

At Walmart’s flagship stores, like the one in Teterboro, NJ, Walmart plays up a lot of its exclusive brands like activewear brand, Love & Sports, and Beautiful, a kitchen and home decor line developed with Drew Barrymore.
Melissa Repko | CNBC

Walmart has weathered recent ups and downs in the retail space better than many of its smaller competitors, especially Target. Why? Because of its grocery business (the biggest in the country) and its scale. Even as supply chain problems and staffing imbalances cut into margins, Walmart still could rely on the strength of its low-cost grocery offerings to lure in even higher-income shoppers looking for value. The overall health and size of its business allows it to mix things up and try new things. Its sleek new store format, which reminds some of Target, fits the bill, especially as Walmart tries to hold on to those more affluent customers shopping the grocery aisles. The remodel is rolling out slowly, but it’s already turning some heads in big population centers.

5. The latest from Ukraine

Ukrainian servicemen launch a drone not far from the Ukrainian town of Bakhmut in the Donetsk region on Jan. 25, 2023, amid the Russian invasion of Ukraine.
Anatolii Stepanov | Afp | Getty Images

Ukraine President Volodymyr Zelenskyy pressed western nations for quicker arms supplies as his country continues to face onslaughts from Russian missiles and fierce fighting on the battlefield. The U.S. and Germany have pledged to send dozens of tanks to Ukraine, leading to speculation that fighter jets would be next. However, German Chancellor Olaf Scholz said his nation opposed sending the aircraft to Ukraine. “The question of combat aircraft does not arise at all,” Scholz said to a German newspaper, according to a translation. Read live war updates here.
– CNBC’s Jesse Pound, Elliot Smith, Melissa Repko and Holly Ellyatt contributed to this report.
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A growing number of Londoners are opting for novel means of buying and selling their properties, with WhatsApp emerging as a new home for luxury listings.
Off-market home sales surged in the British capital in the final three months of 2022, accounting for more than one-in-five (22.3%) transactions, according to Hamptons International.
Messaging apps like WhatsApp are increasingly being used in high-end private transactions.

A growing number of Londoners are opting for novel means of buying and selling their properties, with WhatsApp emerging as a new home for luxury listings.
Bloomberg | Bloomberg | Getty Images

LONDON — In trying times for the U.K. real estate market, a growing number of Londoners are opting for novel means of buying and selling their properties, with WhatsApp emerging as a new home for luxury listings.
Off-market home sales surged in the British capital in the final three months of 2022, according to U.K. estate agents Hamptons International, accounting for more than one-in-five (22.3%) transactions — its highest percentage on record.

The uptick coincides with a period of turmoil for the U.K. property market, during which lenders pulled hundreds of residential mortgage deals and new homebuyer enquiries plunged following then Prime Minister Liz Truss’ chaotic “mini-budget.”
Hamptons senior analyst, David Fell, said that led some vendors to “test the water” discretely without leaving a “digital footprint” and potentially hurting future sale prospects.

Sellers have been increasingly looking to test pricing quietly without leaving a digital footprint.

David Fell
senior analyst, Hamptons International

“Sellers have been increasingly looking to test pricing quietly without leaving a digital footprint, particularly if they chose to take their home off the market with a view to trying again in 6 or 12 months’ time,” he said.
But the figure also marks a continued rise in private property sales in recent years.
Private property sales have almost tripled in London since 2018, when they made up just 8.8% of annual transactions versus 21.2% in 2022, according to the agency. Private sales have also risen nationwide over the period, though to a lesser extent.

Private prime real estate sales lead the charge

London’s luxury real estate market, in particular, has led the off-market trend.
Private sales of £1 million-plus ($1.2 million) homes accounted for almost one-third (32%) of the capital’s total prime real estate transactions in the final quarter of 2022, and 29% over the year, according to Hamptons’ data released last month.
Savills estate agents noted that the “anonymity” of such transactions is especially valued by buyers and sellers of properties in the £20 million-plus range — both in London and the surrounding counties.
“In the last quarter of 2022 in the home counties we did see the overwhelming majority of £20m+ sales being conducted off-market,” Crispin Holborow, country director of The Private Office at Savills, told CNBC via email.
James Myers, director of London-based prime real estate agency Oliver James, told CNBC an increasing number of high-end private transactions are also being conducted via messaging tools like WhatsApp.

With more people using WhatsApp, it’s proven to be a much easier method for estate agents to contact clients, customers etc.

James Myers
Oliver James

“WhatsApp has been an enormous advantage to estate agents in recent years,” Myers said. “With more people using WhatsApp, it’s proven to be a much easier method for estate agents to contact clients, customers etc.”
In particular, Myers noted that additional functions available within the WhatsApp Business app have made it easier to share properties with multiple would-be buyers while still keeping the listing discrete.
The app’s “Catalogs” feature, for instance, which was launched in late-2019, acts as a brochure for businesses to showcase photographs of various products. Previously, businesses had to send product photos one at a time and repeatedly provide information.
“With the added benefit of the new tools … it [has] allowed estate agents to promote their properties via the brochure section, which, as a result, has helped to showcase property to a wider audience and aid the sale of property,” said Myers.
When contacted by CNBC, Meta, Whatsapp’s parent company, said “people want to do business the same way they chat with their friends and family.”
However, while the off-market trend is set to continue into 2024, Hamptons’ Fell said that many sellers may also use private listings as a way to judge buyer appetite before going on to list on the open market.
“We’ll also likely see more sellers start life off-market before deciding to market their home more widely if reaction from ‘black book’ buyers was favorable but they still weren’t quite able to secure a sale,” he said.

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