Finance

Apple device users will soon be able to tap into buy now, pay later loans from Affirm for purchases, the companies said Tuesday.
Affirm will surface as an option for Apple Pay users on iPhones and iPads later this year.
Apple also said that installment loans via credit and debit cards would be available on Apple Pay in the U.S. with Citigroup, Synchrony and Fiserv-related issuers.

Chris Ratcliffe | Bloomberg | Getty Images

Apple device users will soon be able to tap into buy now, pay later loans from Affirm for purchases, the companies said Tuesday.
Affirm will surface as an option for U.S. Apple Pay users on iPhones and iPads later this year, the San Francisco-based fintech company said in a filing. Apple confirmed the news in its own update.

“This provides users with additional payment choices, and offers the ease, convenience and security of Apple Pay alongside the features users love in Affirm – flexibility, transparency and no late or hidden fees,” Affirm said in an email statement.
The move is a boost to Affirm and the buy now, pay later sector in general. When Apple introduced its own BNPL product last year, investors were concerned that the tech giant would crowd out stand-alone providers like Affirm. But the fact that Apple decided to also allow Affirm products in its ecosystem shows that the fintech company has something unique to offer.
For instance, while Apple’s BNPL loan lets users repay purchases in four installments over six weeks, Affirm has an array of longer-term offerings that can be repaid over a year or more. The companies didn’t provide details on the terms of the new loans.
“The bottom-line — in our view — is that Affirm’s strong brand and sophisticated underwriting technology have a moat that Apple likely could not replicate on its own,” Mizuho Securities analyst Dan Dolev said in a research note.

Citi, Synchrony

Apple also said that installment loans via credit and debit cards would be available on Apple Pay in the U.S. with Citigroup, Synchrony and Fiserv-related issuers. Traditional credit card players have begun offering BNPL-style installment loans after their popularity surged during the Covid pandemic

Synchrony said in an email that it was planning personalized installment loans with promotions based on the transaction size and merchant involved, with the possible use of promotional interest rates and loan durations.
“This announcement with Apple marks an opportunity for Synchrony to scale our flexible payment options and offer our merchants the ability to expand their presence in a growing mobile payments ecosystem,” Mike Bopp, Synchrony’s chief growth officer, said in an email.
Thanks to the ubiquity of the iPhone, Apple Pay has more than 500 million users around the world and a leading market share in the U.S. for its mobile payment and digital wallet platform.
Shares of Affirm rose 11% Tuesday, while Apple’s stock was up 7.3%.
Affirm’s stock rose despite the fact that the company indicated it would take time for the partnership to significantly boost its revenue.
“Affirm does not expect this partnership to have a material impact on revenue or gross merchandise volume in fiscal year 2025,” the company said in its filing.

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Ahead of America’s election in November, company bosses, financiers and diplomats are busy calling on Donald Trump’s allies, trying to divine the economic policies that the former president will pursue if he is re-elected. But there is one man in Mr Trump’s orbit who holds more sway than most and who, for now, is virtually inaccessible. That is because he is inmate number 04370-510 in the Federal Correctional Institution of Miami.Peter Navarro, a leading economic adviser in Mr Trump’s first administration, is more than halfway through a four-month sentence for contempt of Congress. He bristles with indignation at the justice system, disdains Joe Biden’s record and longs to steer America towards hardline protectionism. In written correspondence with The Economist, Mr Navarro has laid out how he thinks Mr Trump should approach trade—from turning up the heat on China to slapping tariffs on just about everyone else. It is a dark, angry vision for the global economy. As polls stand, it is one Mr Navarro may shortly be able to promote from inside the White House. More

Homeowners with mortgages have $17 trillion in home equity, near a record high, according to CoreLogic.
Accessing housing wealth is difficult right now due to high interest rates, financial advisors said.
Options for homeowners include a home equity line of credit, reverse mortgage and selling their house.

Cultura Rm Exclusive/twinpix | Image Source | Getty Images

Home equity is near all-time highs. But tapping it may be tough due to high interest rates, according to financial advisors.
Total home equity for U.S. mortgage holders rose to more than $17 trillion in the first quarter of 2024, just shy of the record set in the third quarter of 2023, according to new data from CoreLogic.

Average equity per borrower increased by $28,000 — to about $305,000 total — from a year earlier, according to CoreLogic. Chief Economist Selma Hepp said that’s up almost 70% from $182,000 before the Covid-19 pandemic.
About 60% of homeowners have a mortgage. Their equity equals the home’s value minus outstanding debt. Total home equity for U.S. homeowners with and without a mortgage is $34 trillion.

The jump in home equity is largely due to a runup in home prices, Hepp said.
Many people also refinanced their mortgage earlier in the pandemic when interest rates were “really, really low,” perhaps allowing them to pay down their debt faster, she said.
“For the people who owned their homes at least four or five years ago, on paper they’re feeling fat and happy,” said Lee Baker, founder, owner and president of Apex Financial Services in Atlanta.

Baker, a certified financial planner and a member of CNBC’s Advisor Council, and other financial advisors said accessing that wealth is complicated by high borrowing costs, however.
“Some options that may have been attractive two years ago are not attractive now because interest rates have increased so much,” said CFP Kamila Elliott, co-founder of Collective Wealth Partners and also a member of CNBC’s Advisor Council.
That said, there may be some instances in which it makes sense, advisors said. Here are a few options.

Home equity line of credit

Grace Cary | Moment | Getty Images

A home equity line of credit, or HELOC, is typically the most common way to tap housing wealth, Hepp said.
A HELOC lets homeowners borrow against their home equity, generally for a set term. Borrowers pay interest on the outstanding balance.
The average HELOC has a 9.2% interest rate, according to Bankrate data as of June 6. Rates are variable, meaning they can change unlike with fixed-rate debt. (Homeowners can also consider a home equity loan, which generally carries fixed rates.)
For comparison, rates on a 30-year fixed-rate mortgage are around 7%, according to Freddie Mac.
More from Personal Finance:Buying a house of ‘Home Alone’ or John Lennon fame? Expect a premiumA 20% down payment is ‘definitely not required’ to buy a houseWhat to expect from the housing market this year
While HELOC rates are high compared with the typical mortgage, they are much lower than credit card rates, Elliott said. Credit card holders with an account balance have an average interest rate of about 23%, according to Federal Reserve data.
Borrowers can generally tap up to 85% of their home value minus outstanding debt, according to Bank of America.
Homeowners can leverage a HELOC to pay off their outstanding high-interest credit card debt, Elliott said. However, they must have a “very targeted plan” to pay off the HELOC as soon as possible, ideally within a year or two, she added.

For the people who owned their homes at least four or five years ago, on paper they’re feeling fat and happy.

certified financial planner

In other words, don’t just make the minimum monthly debt payment — which might be tempting because those minimum payments would likely be lower than those on a credit card, she said.
Similarly, homeowners who need to make home repairs or improvements can tap a HELOC instead of using a credit card, Elliott explained. There may be an added benefit for doing so: Those who itemize their taxes may be able to deduct their loan interest on their tax returns, she added.

Reverse mortgage

A reverse mortgage is a way for older Americans to tap their home equity.
Like a HELOC, a reverse mortgage is a loan against your home equity. However, borrowers don’t pay down the loan each month: The balance grows over time with accrued interest and fees.
A reverse mortgage is likely best for people who have much of their wealth tied up in their home, advisors said.
“If you were late getting the ball rolling on retirement [savings], it’s another potential source of retirement income,” Baker said.
A home equity conversion mortgage (HECM) is the most common type of reverse mortgage, according to the Consumer Financial Protection Bureau. It’s available to homeowners who are 62 and older.

A reverse mortgage is available as a lump sum, line of credit or monthly installment. It’s a non-recourse loan: If you take steps like paying property taxes and maintenance expenses, and using the home as your primary residence, you can stay in the house as long as you like.
Borrowers can generally tap up to 60% of their home equity.
The homeowners or their heirs will eventually have to pay back the loan, usually by selling the home, according to the CFPB.
While reverse mortgages generally leave less of an inheritance for heirs, that shouldn’t necessarily be considered a financial loss for them: Absent a reverse mortgage, those heirs may have been paying out of pocket to help subsidize the borrower’s retirement income anyway, Elliott said.

Sell your home

Alexander Spatari | Moment | Getty Images

Historically, the biggest advantage of having home equity was amassing more money to put into a future home, Hepp said.
“That’s historically how people have been able to move up in the housing ladder,” she said.
But homeowners carrying a low fixed-rate mortgage may feel locked into their current home due to the relatively high rates that would accompany a new loan for a new house.
Moving and downsizing remains an option but “that math doesn’t really work in their favor,” Baker said.
“Not only has their home gone up in value, but so has everything else in the general vicinity,” he added. “If you’re trying to find something new, you can’t do a whole lot with it.”

Cash-out refinance

A cash-out refinance is another option, though should be considered more of a last resort, Elliott said.
“I don’t know anyone right now who’s recommending a cash-out refi,” she said.
A cash-out refi replaces your existing mortgage with a new, larger one. The borrower would pocket the difference as a lump sum.

To give a simple example: let’s say a borrower has a home worth $500,000 and an outstanding $300,000 mortgage. They might refinance for a $400,000 mortgage and receive the $100,000 difference as cash.
Of course, they’d likely be refinancing at a higher interest rate, meaning their monthly payments would likely be much higher than their existing mortgage, Elliott said.
“Really crunch the numbers,” Baker said of homeowners’ options. “Because you’re encumbering the roof over your head. And that can be a precarious situation.” More

GameStop shares fell about 12% on Monday.
GameStop released its earnings report days ahead of schedule, reporting that sales dropped 29% in the first quarter.
Meanwhile, meme stock champion Keith Gill hosted his first livestream in a few years Friday.

Keith Gill, a Reddit user credited with inspiring GameStop’s rally, during a YouTube livestream arranged on a laptop at the New York Stock Exchange on June 7, 2024.
Michael Nagle | Bloomberg | Getty Images

GameStop shares fell about 12% on Monday as the meme stock extended Friday’s sell-off sparked by a dismal earnings report and an uninspiring livestream from Roaring Kitty.
The video game company’s stock declined to about $25 apiece on Monday after falling nearly 40% on Friday alone. GameStop released its earnings report days ahead of schedule, reporting that sales dropped 29% in the first quarter. GameStop also announced it was selling an additional 75 million shares.

Meanwhile, meme stock champion Keith Gill hosted his first livestream in a few years Friday. He revealed that he did not have any institutional backers and the GameStop positions he had shared in screenshots were his only bets. Gill also reiterated his previous investing thesis and offered little new reasoning behind his large stake.

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Michael Pachter, GameStop analyst at Wedbush, said he remains skeptical that the company could result in any meaningful turnaround after multiple failed strategies recently.
“We cannot see how GameStop adds any value by operating any new businesses, particularly not now after its entire C-suite was either terminated or chose to depart,” he said in a note.
Pachter noted that GameStop’s prior strategy to be like Amazon was “an abject failure” as three former Amazon executives it hired to pursue the strategy left the company. Then, its plan to sell NFTs fell apart after it partnered with the now-defunct FTX, he added.
The analyst thinks that any boost GameStop got from Gill could turn out to be short-lived.
“We suspect that [Friday’s] live stream from influencer Keith Gill (Roaring Kitty) will keep shares elevated long enough to the company to complete its [at-the-market share offering], but with no clear strategy, we suspect the share price will once again begin to descend and approach our new price target,” Pachter said.

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Traders work on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters

When is the next stock market crash taking place?
It’s a question I get asked often since I wrote “A History of the United States in Five Crashes — Stock Market Meldowns That Defined a Nation.” Until now, I’ve always been able to counsel that stock market crashes are comfortingly rare events that occur only when elements align, and that a crash is unlikely in the near future. Is this still the case?

It’s always helpful to examine the elements that foster a crash.
The first is a frothy stock market.
It is no accident that the first modern stock market crash, the Panic of 1907, occurred after the biggest two-year rally in the history of the Dow Jones Industrial Average. The benchmark gained 95.9% from 1905 to the end of 1906. The crash in 1929 occurred after the second-largest two-year rally ever, up 90.1% from 1927 to 1928. More recently, the S&P 500 was up 43.6% for the year on Aug. 25, 1987, and the largest crash in history occurred 38 trading days later, wiping away all those gains and more.
The second element for a potential crash is rising interest rates. It was the Federal Reserve that pushed short-term interest rates from 1% in May 2004 to 5.25% in September 2006 and unsettled the shadow economy — while making stocks less attractive, as you could make a decent return with no risk by buying T-bills.
The third element is some newfangled financial contraption that injects leverage into the financial system at the worst possible time. In 1987, it was the ill-named portfolio insurance — which was really just a scheme to sell stocks or stock index futures in increasing numbers as the market fell. In 2008, it was mortgage-backed securities and their metastatic offspring such as collateralized debt obligations, collateralized loan obligations and credit default swaps. During the 2010 flash crash it was naive algorithmic trading and the even more naive institutional users who again failed to think about capacity issues.

The most capricious element is a catalyst. That often has nothing to do with financial markets. In 1907, it was the San Francisco earthquake. During the flash crash, it was turmoil in the euro zone that nearly resulted in the collapse of the common European currency. Sometimes the catalyst is legal or geopolitical.
But, for the first time in more than a decade, the elements for a crash are aligning. This certainly doesn’t mean one is inevitable. The elements are necessary, not sufficient, but they’re there.
The S&P 500 has rallied 140% since March 2020, and its forward price-to-earnings ratio is now 20.3. This is only the second time it’s been above 20 since 2001, FactSet data shows.

Stock chart icon

Interest rates have stopped their climb, but the yield on the 10-year Treasury has quadrupled over the last three years. Now, expectations for lower rates are evaporating; option traders would call that a synthetic rate hike.
There’s no telling if there will be a catalyst, but since the catalyst for the 1929 crash was legal and the one for the 1987 crash was geopolitical, we’re primed.
Finally, we come to the contraption. Historically the risk generated by the new contraption that fuels a stock market crash has been both opaque and enormous in size while seasoned with a dash of leverage. That’s why I’ve always said it’s unlikely to be crypto; there’s not enough leverage. But now we’re faced with a collapse in the private credit market, which is essentially hedge funds serving as banks and making loans.
The private credit market is huge — some estimate it’s as large as $3 trillion in the United States alone. There’s a reason these private borrowers don’t turn to traditional banks — they’re usually riskier than a traditional bank wants to deal with. The International Monetary Fund in April warned about private credit by saying: “Rapid growth of this opaque and highly interconnected segment of the financial system could heighten financial vulnerabilities given its limited oversight.” That’s a heck of a contraption the hedge funds have there: enormous, risky, opaque and highly interconnected. It sounds frighteningly familiar.
So how does the prudent investor respond? Not by dumping all your stocks and climbing into a bunker. That’s generally what happens after a crash — investors swear off stocks for a decade or a lifetime and miss all the later gains. It’s not by speculating on a crash. It’s both expensive and impossible to pick a top, and even if you do, you also have to pick the subsequent bottom at a time when fear dominates and greed disappears.
Fortunately, the things that do work are simple and straightforward. Do you have the right sort of diversification? A traditional 60/40 portfolio still works, and it would be easy, given this year’s price action, to be overweight stocks and underweight the bonds that benefit from a crash-induced flight to quality.
Are you overweight this year’s highest fliers? Congratulations if you are, it means you’ve done well. But the S&P 500 Index is up 12% this year while the S&P 500 Equal Weight Index is up just 4%. That means the biggest names and highest fliers are responsible for the bulk of the market’s gains this year.
Finally, stick with your plan. Looking back, all those crashes seem like wonderful buying opportunities. That’s because the American stock market is the place to be, even if it’s occasionally painful.
— Scott Nations is president of Nations Indexes, Inc. More

Investors in China’s stockmarket have been doing handsomely this year. The Shanghai composite index has risen by 13% from a multi-year low in February, notwithstanding a recent drop. Equity analysts and state media alike are cheering. For Xi Jinping, China’s leader, the rally was a relief, since retail investors own at least 80% of the market. A previous rout hurt them badly, adding to anxieties about the country’s future. To many, the recovery reflected good governance and fortune.Part of the rally came from the purchase of tens of billions of dollars-worth of shares by the “national team”, a group of state-owned institutions that ride to the rescue when China’s markets wobble. For Mr Xi, the bill may appear worth it. But the state has also tinkered with the market in other, more destructive ways. In an effort to boost share prices, it has put an end to a bonanza in initial public offerings (IPOs). With fewer exit opportunities for private investors, state capital has become more dominant. The danger is that these distortions will crimp the growth of China’s most innovative firms. More

A number of famous homes are for sale. They include the houses in “Home Alone” and “Full House,” as well as properties owned by Beatles member John Lennon and Yoko Ono, and actor Paul Reubens, known for his character Pee-wee Herman.
Renowned homes typically fetch a price premium, according to luxury real estate agents.
Wealthy buyers who view the homes as collectibles are generally willing to pay anything, they said.

The original house used in the “Home Alone” movies on Nov. 8, 2021.
Erin Hooley/Chicago Tribune/Tribune News Service via Getty Images

An array of iconic homes are for sale — and buyers will almost certainly pay extra for that pedigree.
However, that premium is hard to quantify since some uber-wealthy buyers will pay almost anything to own a piece of pop culture, according to real estate experts.

“It’s like owning a Picasso” or a Fabergé egg, said Tomer Fridman, a real estate agent based in Los Angeles who specializes in luxury and celebrity homes.
“You’re buying something that’s super unique and something that is very rare,” he said.

Buying for ‘Hollywood cachet’

Among recent notable listings: The Victorian home depicted on the sitcom “Full House” hit the market Thursday in San Francisco for $6.5 million. Last month, the “Home Alone” house — the brick estate famously boobytrapped by character Kevin McCallister — listed for $5.25 million.
John Lennon and Yoko Ono’s first New York City home, a two-story SoHo loft, also hit the market for $5.5 million in May. The Los Angeles home of the late Paul Reubens, best known for his character Pee-wee Herman, is also for sale, for about $5 million.
More from Personal Finance:36% of Americans think real estate is best long-term investmentInvestor home purchases jump for the first time in two years20% down payment is ‘definitely not required’ to buy a house

Luxury real estate prices recently hit a record high. The uber-wealthy are largely insulated from high mortgage rates since many can afford to make all-cash deals, according to real estate experts.
Famous homes generally command even loftier price tags than their market equivalents, those experts said.
Josh Altman, a luxury real estate agent in Los Angeles who is featured on the Bravo show “Million Dollar Listing,” estimates the premium can be perhaps 5% to 10% if the home is tied to a “household name” celebrity.
“There’s definitely this Hollywood cachet of ‘I bought so-and-so’s house,'” said Altman. His firm’s clients have included stars like Justin Bieber, James Cameron, Alicia Keys and Britney Spears.
“Home Alone” is “one of the most famous movies ever,” he added. “That’ll definitely get a premium, in my opinion.”

The rich often pay ‘whatever it takes’

The ultimate price tag on such homes generally doesn’t matter to their uber-wealthy buyers, said Fridman, who has sold properties owned by celebrities including Marilyn Monroe, Sylvester Stallone, and Kylie Jenner and Travis Scott.
Many view the house as a collector’s item and make an “emotional purchase,” Fridman said.
Sellers can rake in a premium for a particular famous property via an initial pie-in-the-sky asking price or if potential buyers get into a bidding war, experts said.
“They’re one of one,” said Amanda Pendleton, a home trends expert at Zillow. “Some people with means will pay whatever it takes to own that home.”

Fans gather to take photos at 1709 Broderick Street, the house depicted in the filming of the TV show “Full House.” 
Carlos Avila Gonzalez/San Francisco Chronicle via Getty Images

The listing for the “Home Alone” property, outside Chicago, leans into its collector status, spotlighting the “rare opportunity to own one of the most iconic movie residences in American pop culture.”
An offer is pending on that home and was made within a week of being on the market, said Andrea Gillespie, a spokesperson for Coldwell Banker Real Estate. The sellers’ asking price is more than triple the $1.585 million they paid in 2012.
The listing for John Lennon and Yoko Ono’s residence — the first time it’s been for sale in 53 years — also plays up its former occupants’ fame.
“Anywhere that they lived is going to have some sort of value,” according to Philip Norman, author of the biography “John Lennon: The Life,” recently told The New York Times.
Buyers of the “Full House” home have the option of getting handprints in concrete stones of the show’s cast members, including Bob Saget and John Stamos, according to Architectural Digest.

Infamy sells, too

Infamy can also fetch a higher price, said Arto Poladian, a Redfin luxury real estate agent in Los Angeles.
In 2021, Poladian sold the so-called LaBianca house — the home where Charles Manson’s followers killed Leno and Rosemary LaBianca in 1969 — for $1.875 million.
The property’s notoriety generated interest and attracted more prospective buyers — “and ultimately with that interest you get a little bit of a higher premium than without it,” Poladian said.
The listing was geared to buyers like “history buffs” or those who wanted to “add their touches to reimagine one of LA’s most unique properties.”

It’s like owning a Picasso.

Tomer Fridman
luxury real estate agent

Sometimes, even being in the vicinity of a famous residence can help, he added. For example, in 2018 he sold the house next door to the one used for the filming of the original “The Karate Kid” movie.
“Any type of famous home — or a home next to a famous home — will draw interest from prospective buyers and lookie-loos,” he said.
There’s sometimes a ceiling to what super fans are willing to pay, said Pendleton.
She cited the “Brady Bunch” house as an example: The Studio City, California, home — which was remodeled to look identical to the home on the TV series — sold for about $3.2 million in 2023 after months on the market; it had been listed for $5.5 million.
The publicity attached to certain properties is likely a “turnoff” for some would-be buyers, Pendleton said.

Similarly, a superstar’s home won’t command as much of a premium if it’s not updated and move-in-ready, said Poladian.
For example, Kanye West — the rapper who now goes by Ye — bought a Malibu, California, mega-mansion for $57.3 million in 2021. However, he has struggled to sell the home, which he gutted and left in disrepair; he listed the home last year for $53 million but recently dropped the price to $39 million. (A contractor also sued West in January and a lien was placed on the property, potentially complicating a sale.)
“Kanye West can’t give his house away in Malibu,” said Altman, the Los Angeles real estate agent.
Ultimately, though, a home’s value — whether a sprawling, renowned estate or a run-of-the-mill bungalow — is in the eye of the beholder.
“At the end of the day, a home is worth whatever the person is willing to pay for it,” Pendleton said.

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An alternative trading platform CEO wants to revolutionize private equity investing to help mitigate a stalling initial public offering market.
So, Forge Global’s Kelly Rodriques partnered with Accuidity to launch the Forge Accuidity Private Market Index this spring.

The ultimate goal: Give more investors easier access to unicorns.
“This is a major financial innovation that’s just happening now,” Rodriques told CNBC’s “ETF Edge” this week. “There is a future … where index products and other financial innovations are making it possible for every investor to participate.”
The Forge Accuidity Private Market Index consists of 60 private companies including SpaceX, Stripe and Epic Games, according to Forge Global’s website. But as of right now, access is still closed off to everyday investors. 
“Today, the regulations are such that you need to have a minimum net worth to meet the threshold of being accredited,” Rodriques said. 
That means even with Forge’s new initiative, only institutional investors and individuals with a high net worth can purchase shares. But anyone, accredited or not, can sell their shares of private companies on the platform. However, those same companies still have a right to refuse transactions on the platform.  

Rodriques hopes as interest in private investing increases, those regulations will shift. 
“We see a world very soon, where nonaccredited investors can come into a basket of index stocks and make a bet across 60 to 70 names, thematics, the same way you do in the public market, and that will really open it up,” he said.
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