—— US Mortgage Applications Rise for First Time in Four Weeks; Lone Star Funds to Return $3.5 Billion to Investors; Disney Raises 2025 Outlook as Parks and Streaming Boost Q2 Results; US Airport Delays Expected as REAL ID Travel Rule Takes Effect; Federal Job Cuts Fuel Record Housing Inventory Surge in Washington, DC; US-China to Hold First Trade Talks Since Tariff War Began
1. US Mortgage Applications Rise for First Time in Four Weeks
Mortgage applications for both home purchases and refinancing rose last week, marking their first increase in four weeks, as borrowing costs declined slightly.
An index tracking mortgage applications for home purchases surged 11.1% — the largest weekly jump since January — while refinancing applications climbed by a similar amount, according to data released Wednesday by the Mortgage Bankers Association.
The average contract rate for a 30-year fixed mortgage fell by 5 basis points to 6.84% in the week ending May 2. Rates for five-year adjustable-rate mortgages (ARMs) ticked higher but remained below mid-April levels.
Mortgage rates broadly track US Treasury yields, which declined for much of last week before rebounding on Friday following a strong labor market report. Markets will watch for comments from Federal Reserve Chair Jerome Powell later today for signals on rate policy.
While concerns remain that US trade policies could fuel inflation and hurt the job market, recent housing data indicate resilient demand. New-home sales in March exceeded forecasts, and contract signings for existing homes rose by the most in over a year.
Source: Bloomberg – US Mortgage Applications Climbed Last Week as Rates Eased
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2. Lone Star Funds to Return $3.5 Billion to Investors
Lone Star Funds is preparing to return $3.5 billion to its investors in the coming weeks, according to people familiar with the matter, as private equity firms face mounting pressure to deliver liquidity.
Roughly $1.8 billion of that total came from the $4.35 billion sale of specialty chemicals company AOC to Nippon Paint Holdings in March, yielding more than a 3x return on invested capital for the firm, the people said.
Another major source of cash is Lone Star’s investment in Portuguese bank Novo Banco SA, which is set to pay out $1.1 billion in dividends within weeks. The buyout firm also stands to benefit from a planned IPO of the bank, which CEO Mark Bourke said could take place as early as June, with the prospectus already in advanced stages.
Additional proceeds came from investments in Titan Acquisition Holdings — a ship repair and marine fabrication firm acquired from Carlyle Group and Stellex Capital in 2023 — and from telecom company GTT Communications, which reemerged from Chapter 11 bankruptcy two years ago.
Source: Bloomberg – Lone Star Is Set to Return $3.5 Billion to Investors in Weeks
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3. Disney Raises 2025 Outlook as Parks and Streaming Boost Q2 Results
Walt Disney Co. delivered better-than-expected fiscal second-quarter earnings and raised its full-year outlook, fueled by strong performances in its theme parks and streaming divisions. The stock jumped 7.6% in premarket trading following the report.
For fiscal 2025, the company now expects adjusted earnings to rise 16% to $5.75 a share — nearly double its earlier forecast. Analysts had been projecting $5.44 a share.
While many major companies have pulled their 2025 guidance amid the uncertainty caused by President Donald Trump’s tariffs on imported goods, Disney cited robust momentum in its core businesses as reason for the increased forecast.
“We remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year,” CEO Bob Iger said in a statement.
He added, however, that the company will “continue to monitor macroeconomic developments” and recognizes ongoing “uncertainty” for the rest of the year.
Source: Bloomberg – Disney Raises Profit Forecast on Strong Parks, Streaming
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4. HSBC Faces Major Desk Shortage Ahead of London Headquarters Move
As HSBC Holdings Plc prepares to relocate to its new headquarters in London’s Square Mile as early as next year, the bank is facing a more severe desk shortage than previously expected.
According to people familiar with the matter, internal projections now show a potential shortfall of 7,700 desks — significantly higher than the earlier estimate of fewer than 5,000.
The worsening shortage stems from a combination of stricter return-to-office mandates and a larger-than-anticipated London-based workforce. Senior managers are reportedly evaluating multiple relocation scenarios to address the challenge.
HSBC’s move to a smaller building marks a major shift from its longtime Canary Wharf base and reflects broader efforts to cut real estate costs and adapt to post-pandemic work patterns.
Source: Bloomberg – HSBC Grapples With Shortage of 7,700 Desks at New London HQ
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5. US Airport Delays Expected as REAL ID Travel Rule Takes Effect
A new federal identification rule went into effect Wednesday requiring US airline passengers on domestic flights to show a REAL ID-compliant form of identification at security checkpoints — a change likely to cause delays at airports ahead of the busy summer travel season.
The rule ends the longstanding practice of accepting standard state-issued driver’s licenses for domestic air travel. Passports and some enhanced driver’s licenses will still be valid.
Homeland Security Secretary Kristi Noem warned lawmakers Tuesday that passengers lacking proper ID “may be diverted to a different line” and face “an extra step,” but emphasized that travelers will still be allowed to board their flights.
The REAL ID Act, originally passed in 2005 based on recommendations from the 9/11 Commission, has seen repeated delays due to resistance from states citing cost and implementation hurdles.
Noem told a House subcommittee that as many as 81% of travelers already have compliant identification. TSA officers will also continue to accept US passports and tribal IDs as valid alternatives.
Source: Bloomberg – REAL ID Checks Are Set to Disrupt Travel at Airports Across US
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6. Federal Job Cuts Fuel Record Housing Inventory Surge in Washington, DC
The Washington, DC housing market saw a historic jump in inventory as federal workforce reductions under President Donald Trump’s administration ripple through the local economy.
According to Redfin Corp., the number of homes for sale in the DC metro area rose 25% year-over-year in the four weeks ending April 27 — the biggest increase since at least 2015 and significantly above the national average of 14%.
The surge follows mass layoffs across federal agencies, a key component of Trump’s government spending cutback strategy. Suburban areas were hit especially hard: listings climbed 41% in Alexandria, Virginia, and nearly 39% in Montgomery County, Maryland.
“Quite a few people in DC are selling their homes because they’re losing their jobs,” said Redfin agent Mary Bazargan. “Many are relocating to areas with lower living costs or seeking remote work opportunities to be closer to family.”
Source: Bloomberg – Homes for Sale in DC Surge by Record as DOGE Job Cuts Take Hold
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7. US-China to Hold First Trade Talks Since Tariff War Began
Washington and Beijing are set to hold their first high-level trade talks this week since President Donald Trump launched a sweeping trade war that has rattled global financial markets and raised alarms over supply chain security.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with their Chinese counterparts in Geneva, with Chinese Vice Premier He Lifeng — the country’s top economic policymaker — leading Beijing’s delegation.
This marks the first formal engagement between the two sides since Chinese Vice President Han Zheng attended Trump’s inauguration in January.
Bessent told Fox News on Tuesday that the meetings would take place over the weekend and that both sides had a “shared interest” in engaging because the current 145% US tariff level “isn’t sustainable.” However, he emphasized that the talks are aimed at easing tensions rather than striking a comprehensive trade deal.
“My sense is that this will be about de-escalation, not about the big trade deal,” Bessent said. “We’ve got to de-escalate before we can move forward.”
This diplomatic thaw offers a glimmer of hope to businesses on both sides of the Pacific that have been struggling with unprecedented trade barriers. It also follows several occasions where Trump claimed negotiations were ongoing — only to be contradicted by his own advisers.
The talks represent the first substantive step toward resolving a tariff standoff that has seen the US impose a 145% levy on Chinese imports, with China responding with a 125% duty on American goods.
Source: Financial Times – US and China to launch formal trade talks
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