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Elon Musk decides not to join Twitter board, says CEO Parag Agrawal

Tesla and SpaceX CEO Elon Musk has abandoned his plans to join the board of Twitter, his social network of choice.

Twitter CEO Parag Agrawal announced publicly on Sunday that Musk remains the largest shareholder of Twitter, and the company will remain open to his input.

Musk informed Twitter on Saturday morning that he would not, in fact, take the board seat.

Musk’s appointment would have started on Saturday, “contingent on a background check and formal acceptance,” according to Agrawal.

“We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders was the best path forward,” he wrote.

The Twitter CEO did not say whether Musk gave specific reasons for changing his mind about taking on the new obligation.

Encouraging Twitter employees to remain focused, Agrawal said, “There will be distractions ahead but our goals and priorities remain unchanged.agrawal.

On April 5, Elon Musk and Twitter said he would be joining Twitter’s board. A day earlier, the Tesla CEO and world’s richest person disclosed via financial filings that he’s the social media company’s biggest shareholder.

Twitter’s stock jumped 4% on Tuesday following the board announcement. On Monday, after Musk’s stake was initially revealed, Twitter had its best day since the company’s IPO in 2013, skyrocketing more than 27%. 

A financial filing from Twitter specified that as long as Musk served on its board, he would be limited to owning no more than a 14.9% stake in the company’s common stock outstanding, including through derivative securities, swaps, or hedging transactions.

Musk could theoretically increase his 9% stake beyond that limit now.

Throughout the weekend, without revealing that he had turned down the board seat at Twitter, Musk posted a number of ideas to transform the social media company and its products.

One of the suggestions was a coarse joke in the form of a Twitter poll. Musk asked people to vote on whether Twitter should drop the “w” from its name. Doing so would turn Twitter into “titter,” an allusion to female anatomy.

More serious suggestions from Musk included to let Twitter Blue subscribers pay with dogecoin, get an “authentication” checkmark, and keep Twitter Blue free of advertisements.

“Everyone who signs up for Twitter Blue (ie pays $3/month) should get an authentication checkmark,” Musk wrote. “And no ads. The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.”

Musk also suggested that Twitter should turn its headquarters office in San Francisco into a homeless shelter, “since no one shows up anyway.”

Musk’s competitor and fellow centi-billionaire, Jeff Bezos, chimed in. Bezos said Twitter could turn a portion of its office into a shelter. “Worked out great and makes it easy for employees who want to volunteer,” he said sharing a story about a similar initiative at Amazon.

Chinese indexes drop at least 2% after data shows China producer inflation surging

SINGAPORE — Chinese stocks led losses in Asia-Pacific markets in Monday trade as investors reacted to China’s inflation data for March.

The Shanghai composite was down 1.75% while the Shenzhen component tumbled 2.74%.

Hong Kong’s Hang Seng index dropped 2.45%. Hong Kong-listed shares of Chinese electric vehicle maker Nio plunged more than 8% after the firm announced a suspension in production due to disruptions at its supply chain partners as a result of Covid.The more notable fact is the big gap between [China’s consumer price index] and [producer price index], and that indicates that pricing power amongst most companies in China is weak and they’re taking a hit on margins.Ramiz ChelatPORTFOLIO MANAGER, VONTOBEL ASSET MANAGEMENT

China’s producer inflation for March was higher than expected. The producer price index surged 8.3% as compared with a year ago, official data showed Monday, above expectations for a 7.9% increase in a Reuters poll.

Chinese consumer inflation also rose more than expected in March, with the consumer price index climbing 1.5% year-on-year. That was above expectations in a Reuters poll for a 1.2% increase.

The data release comes as mainland China is fighting to control its worst wave of Covid since the beginning of the pandemic in early 2020.

“I think the more notable fact is the big gap between CPI and PPI, and that indicates that pricing power amongst most companies in China is weak and they’re taking a hit on margins,” Ramiz Chelat, portfolio manager at Vontobel Asset Management, told CNBC’s “Street Signs Asia” on Monday.

“Given the infectiousness of omicron, we could see more localized lockdowns being a recurring theme,” he said. “We think you need to be very selective in China, look for companies that can deliver in a growth-challenged environment.”

Elsewhere, the Nikkei 225 in Japan slipped 0.8% while the Topix index shed 0.63%. South Korea’s Kospi dipped 0.35%.

Australia’s S&P/ASX 200 bucked the overall trend regionally as it climbed slightly.

Over in Southeast Asia, shares of tech firm GoTo soared more than 15% from their issue price as they made their debut in Indonesia. The broader Jakarta Composite also gained 0.76%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.26% lower.

Oil falls more than 2%

Oil prices were lower in the afternoon of Asia trading hours, with international benchmark Brent crude futures down 2.33% to $100.39 per barrel. U.S. crude futures shed 2.39% to $95.91 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.922 after recently crossing the 100 level.

The Japanese yen traded at 124.86 per dollar, weaker as compared to levels below 123.2 seen against the greenback last week. The Australian dollar was at $0.7438 following last week’s drop from above $0.763.

Elon Musk proposes Twitter Blue subscription shakeup days after disclosing 9.2% stake

Elon Musk, Twitter Inc’s biggest shareholder, on Saturday suggested a raft of changes to the social media giant’s Twitter Blue premium subscription service, including slashing its price, banning advertising and giving an option to pay in the cryptocurrency dogecoin.

Musk, who disclosed a 9.2% stake in Twitter just days ago, was offered a seat on its board of directors, a move which made some Twitter employees panic over the future of its ability to moderate content.

Twitter Blue, launched in June 2021, is Twitter’s first subscription service and offers “exclusive access to premium features” on a monthly subscription basis, Twitter says. It is available in the United States, Canada, Australia and New Zealand.https://platform.twitter.com/embed/Tweet.html?c

In a Twitter post, the head of electric vehicle maker Tesla Inc suggested that users who sign up for Twitter Blue should pay significantly less than the current $2.99 a month, and should get an authentication checkmark as well as an option to pay in local currency.

“Price should probably be ~$2/month, but paid 12 months up front & account doesn’t get checkmark for 60 days (watch for credit card chargebacks) & suspended with no refund if used for scam/spam,” Musk said in a tweet.

“And no ads,” Musk suggested. “The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.”

Musk also proposed an option to pay with dogecoin and asked Twitter users for their views.

Twitter declined to comment on Musk’s suggestions.

The company already lets people tip their favorite content creators using bitcoin. Twitter had said last year that it planned to support authentication for NFTs, or non-fungible tokens, which are digital assets such as images or videos that exist on a blockchain.

Musk also started a poll on his Twitter account – which has more than 81 million followers – asking whether the firm’s San Francisco headquarters should be converted to a homeless shelter as “no-one shows up (to work there)”. The poll got more 300,000 votes in an hour, with 90% answering yes.

Keeping up with all the changes that come with every new taxation year can be difficult, especially if a client is in a complex situation such as being a caregiver or trying to determine the provisions between provincial and federal governments.

With more than three weeks to go before the tax-filing deadline, advisors have the opportunity to check in with such clients to make sure they’re on track to apply for the right claims or exemptions – depending on their situations.

Evelyn Jacks, tax expert and president of the Knowledge Bureau Inc., spoke with Globe Advisor editor Pablo Fuchs about the key tax changes for educators, students and those with disabilities.

What changes to tax credits should taxpayers be aware of this season?

If you’re an eligible educator, certified teacher, or a child care educator, then we have an educator tax credit and it has increased to 25 per cent from 15 per cent of $1,000. That’s $250 in real terms on the federal government’s side. Now, we have one in Manitoba, and it’s sort of an equivalent or a mirrored amount as it’s at 15 per cent. [But] federal and provincial taxes don’t necessarily mirror each other with all of the provisions, [which is] another thing for people to keep in mind.

We have had some changes to the disability tax credit as well. That’s a very lucrative credit. If you’re taking care of someone who has dementia, Alzheimer’s, or some kind of emotional behavioral [impairment] … that markedly restricts their daily living activities, then you will be able to perhaps qualify this year if you have the right form you’re filing… which is T2201. You have to get it over to your doctor.

Can you explain the changes affecting registered retirement savings plan (RRSP) contribution room?

First of all, you have to look to your [clients’] notice of assessment to make sure they understand what their contribution room is. Second, the government is starting to play with that contribution room with other provisions.

For example, currently, we have a new change that if you have a postdoctoral student and they had earnings granted to them to do those studies, the government is now going to allow you to go back to 2001 – over a 10-year period – to create unused RRSP contribution room. That’s fantastic news, but [eligible clients] have to apply for that by 2026. So, a professor or someone who is working on postdoctoral studies at this time, that’s really good news for them.

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Likewise, we have another provision whereby people who have contributed to a defined-contribution [pension] plan are going to be able to correct over or under contributions to those plans with the result that their pension adjustment could change. That could result in a negative RRSP contribution room in some cases. So, we want to watch for that because it’s going to become a new [financial] planning scenario.

Bank of Canada expected to announce oversized rate hike this week

The Bank of Canada is expected to announce its first oversized interest-rate hike in more than two decades this week after hawkish comments from the country’s top central bankers and growing signs that the economy is overheating.

Governor Tiff Macklem and his team have so far taken a gradual approach to tightening monetary policy, keeping borrowing costs near record lows and changing policy levers in a deliberate manner.

But with inflationary pressures broadening, and Russia’s invasion of Ukraine sending energy and food prices soaring, bank officials appear ready to push Canadian interest rates up aggressively.

There is a broad consensus among Bay Street economists that the central bank will raise its policy interest rate by half a percentage point at its Wednesday rate announcement, instead of the usual quarter percentage point. The last time it did this was in May, 2000.

This coincides with a growing sense that central bankers waited too long to start raising rates, and that the world may be entering a period of persistently higher inflation

Deputy governor Sharon Kozicki gave credence to the idea of an oversized rate hike in a speech last month. She said the bank was “prepared to act forcefully” to combat inflation, which hit a three-decade high of 5.7 per cent in February. She added that the governing council would likely discuss both the pace and magnitude of increases ahead of the April 13 rate decision – a strong hint that a half-percentage-point rate hike is on the table.

The Bank of Canada kicked off a rate-hike cycle last month, increasing its policy rate to 0.5 per cent from 0.25 per cent. Borrowing costs are still well below normal levels, and analysts expect the bank to proceed with a quick succession of rate hikes, pushing the policy rate above the prepandemic level of 1.75 per cent by the end of the year.

Recent economic data has bolstered the case for a half-percentage-point move this week.

On Friday, Statistics Canada reported that the country added another 73,000 jobs in March, bringing the unemployment rate down to 5.3 per cent, the lowest in nearly five decades of comparable data. Meanwhile, a Bank of Canada business survey, published last week, showed that companies are struggling with labour shortages and rising input costs, and are planning to pass higher expenses to consumers.

This suggests that the Canadian economy has fully recovered from the pandemic downturn and is now bumping up against capacity limits, Royal Bank of Canada economist Claire Fan said in an interview.

SpaceX capsule carrying businessmen that paid $55M each docks at space station

https://www.foxbusiness.com/technology/spacex-capsule-docks-space-station

Covid outbreak in Shanghai has dogs on lockdown with their owners

The citywide lockdown in Shanghai, the site of China’s worst coronavirus outbreak in two years, is so strict that even some dogs can’t go out. So their owners are bringing the outdoors to them.

For Anjo, a 2-year-old Pomeranian mix, that means a little patch of leaves and grass that Dani Chapman has cobbled together on her balcony while she watches the dog for a friend who’s in quarantine.

“We’ve had to come up with really creative ways to encourage the dogs to use the bathroom inside,” said Chapman, 32, an English teacher from Ireland who also volunteers with animal rescue groups. 

Almost all 26 million residents in Shanghai, China’s largest city and financial center, are on lockdown in a major test of the country’s zero-tolerance pandemic strategy, which seeks to minimize cases through border closures, mass testing, contact tracing and quarantine. On Friday, the city reported a record 21,000 new cases, almost all of them asymptomatic.

The lockdown bars residents from leaving their gated compounds and sometimes even their apartments, and the government has not said whether that applies to pets as well. Chapman said the final decision rests with each compound.

Read more from NBC News:

As Covid spreads through D.C., it’s business as usual at the White HouseSeven days, 18,000 deaths: A look at omicron’s deadliest weekThere’s an uptick in U.S. vaccinations, and older Americans are the reason

Some communities have agreed to make an exception for dog walking but others refuse or leave the rules ambiguous, meaning dogs in some parts of the city have been kept inside for almost two weeks.

“It’s just all based on luck and how understanding your community committee is, which really isn’t fair to the dogs,” Chapman said.

Pet owners trying to follow the rules are doing their best to simulate the outdoors, which works better for some dogs than others. Like Chapman, Kyle Chen covered part of his balcony with leaves and grass for Kaka, his 4-year-old schnauzer. The dog wasn’t having it. 

As a last resort, Chen began walking Kaka secretly when no one was around, usually early in the morning or late at night.

“I’ve exhausted all the means,” he said, adding that their surreptitious strolls had been approved by the anti-epidemic rule enforcer in his compound.

Shanghai residents confined to their homes have complained of difficulties obtaining food and medical care, concerns that pet owners say extend to animals as well. The lockdowns were originally set to last only five days, and many people were unprepared for them to be extended as testing turned up new cases. Panic buying, store closures and a shortage of delivery workers have some owners worried about what their pets will eat.

Others worry their pets will be unable to get veterinary care because many animal hospitals are closed.

“What if something urgent happens, who else could come to our aid?” said Ashley Huang, who has a 3-year-old Shetland sheepdog named Dundun.

Another issue causing pet owners distress is what happens if they or someone they know tests positive for the virus. According to Chinese government policy, Covid-19 patients and their close contacts are sent to centralized quarantine facilities, while those with more severe symptoms are hospitalized. But it’s unclear what happens to their pets.

Chen said he could not imagine being separated from Kaka if he became infected.

“It is like you’re letting your 4-year-old child travel alone,” he said.

A simulated outdoor environment didn’t work so well for Kyle Chen’s 4-year-old schnauzer, Kaka. Courtesy Kyle Chen

Throughout the pandemic, there have been reports across China of pets being killed in the name of virus prevention after their owners are sent to isolation or quarantine, causing an outcry among the country’s growing legion of devoted pet owners. This week, a video widely shared online appeared to show an anti-epidemic worker in Shanghai beating a corgi to death on the street after its Covid-positive owner had been taken away.

After seeing the video, “who will not start to worry about what their pets are going to suffer if they test positive?” Huang said.

The incident was similar to one in Jiangxi province in November, when a woman shared video from a home security camera of two anti-epidemic workers beating her corgi to death while she was in quarantine.

There is little risk of animals spreading the virus to people, according to the Centers for Disease Control and Prevention.

By contrast, the southern city of Shenzhen, which recently underwent a weeklong lockdown, has set up China’s first “pet cabin,” a space of about 16,000 square feet that can accommodate about 300 pets for free to ease the concerns of owners who are in isolation or quarantine. Shanghai residents have appealed to the government to establish something similar.

Chen said there would be less panic if the government made the arrangements crystal clear.

“Because we will be secure in the knowledge of how our pets will be treated,” he said.

New study lists Asian countries that will be hit hardest — and least — by the Ukraine war

From food prices to tourism and weapons supply, Asia-Pacific countries could be hit hard by the Russia-Ukraine war, even if they are not directly exposed to the conflict, according to a new Economic Intelligence Unit report.

Food prices are particularly sensitive to the war as both countries are significant commodity producers, according to the research firm. Some Asian countries rely on commodities such as fertilizer from Russia, and a global shortage is already driving up prices of agriculture and grains.

Given the region’s relatively high levels of dependence on energy and agricultural commodity imports – even if countries don’t source directly from Russia or Ukraine, the spike in prices will be concerning, warned the EIU.

“Niche dependencies include reliance on Russia and Ukraine as a source of fertiliser and grain in South-east and South Asia, which could cause disruption in the agricultural sector,” said the firm.

The world’s major powers have hit Russia with wide-ranging sanctions over Russia’s unprovoked war on Ukraine. The U.S. has imposed sanctions on energy, while the U.K. plans to do so by the end of the year. The European Union is also considering whether to do the same.There will be export benefits for some countries from higher commodity prices and a global search for alternative supply.Economic Intelligence Unit

Sanctions have also been slapped on the country’s oligarchs, banks, state enterprises, and sovereign bonds.

“North-east Asia — home to the world’s leading chipmakers — also has some exposure to any disruption in the supply of rare gases used in semiconductor production,” EIU said in its report.

Other areas that may be impacted include Russian tourists preferring to stay away, as well as some Asia-Pacific countries that may be cut off from Russian weapons.

Winners and losers from commodity spikes

Global prices for oil, gas and grains have already spiked since the war started in late February.

Russia and Ukraine contribute a significant percentage of the world’s supply for some of those commodities.

Wheat futures pared some gains from the initial spike, but are still up 65% compared to a year ago. Corn futures are up over 40% in the same period.

Some countries will be vulnerable to the price surge, but others may benefit.

“There will be export benefits for some countries from higher commodity prices and a global search for alternative supply,” said EIU.WATCH NOWVIDEO03:53The global shortage of fertilizer is a huge problem, says CF Industries Holdings CEO

Besides food and energy, nickel supply has also been hit as Russia is the world’s third-largest supplier of nickel.

Countries that will benefit from higher commodity prices:

• Coal exporters: Australia, Indonesia, Mongolia
• Crude oil exporters: Malaysia, Brunei
• Liquefied natural gas: Australia, Malaysia, Papua New Guinea
• Nickel suppliers: Indonesia, New Caledonia
• Wheat suppliers: Australia, India

Countries most vulnerable to rising prices (imports from Russia/Ukraine as a percentage of 2020 world imports):

• Fertilizer: Indonesia (more than 15%), Vietnam (more than 10%), Thailand (more than 10%), Malaysia (about 10%), India (more than 6%), Bangladesh (nearly 5%), Myanmar (about 3%), Sri Lanka (about 2%)
• Cereals from Russia: Pakistan (about 40%), Sri Lanka (more than 30%), Bangladesh (more than 20%), Vietnam (nearly 10%), Thailand (about 5%), Philippines (about 5%), Indonesia (less than 5%), Myanmar (less than 5%), Malaysia (less than 5%)
• Cereals from Ukraine: Pakistan (nearly 40%), Indonesia (more than 20%), Bangladesh (nearly 20%), Thailand (more than 10%), Myanmar (more than 10%), Sri Lanka (nearly 10%), Vietnam (less than 5%), Philippines (about 5%), Malaysia (about 5%)

Russian arms

Russia is the world’s second largest arms supplier. It has been a major source of weaponry for China, India and Vietnam over the past two decades, the EIU pointed out.

“International sanctions on Russian defence firms will impede the future access of Asian countries to these arms,” the research firm said.

However, that will also create new opportunities for manufacturers from other countries, as well as domestic producers, the report said.WATCH NOWVIDEO03:22If the Russians get bogged down, Putin will use chemical weapons, says Col. Jack Jacobs

Countries most dependent on Russian arms imports from 2000-2020, ranked by share of total imports

• Mongolia (about 100%), Vietnam (more than 80%), China (nearly 80%), India (more than 60%), Laos (more than 40%), Myanmar (about 40%), Malaysia (more than 20%), Indonesia (more than 10%), Bangladesh (more than 10%), Nepal (more than 10%), Pakistan (less than 10%)

Loss of Russian tourists

While Asia’s air routes are still open to Russian airlines, tourists from the country may not visit, the EIU pointed out.

“Tourism is the main potential exposure within services trade, and with Asian air routes still open to Russian airlines, unlike those in Europe, such trade could continue (and potentially expand),” the research firm said.

“However, the willingness of Russians to travel will probably be affected by economic disruption, rouble depreciation and the withdrawal of international payment services from Russia,” it added.

Several Russian banks have also been cut out of SWIFT, a global system connecting more than 11,000 member banks in some 200 countries and territories globally.WATCH NOWVIDEO09:50How Russian banks got cut out of global finance: A ‘SWIFT’ system explainer

Meanwhile, the ruble initially dived nearly 30% against the dollar as the war began. Since then, the currency has bounced back but was last trading about 10% lower than the start of the year, hurting the wallets of ordinary Russians.

However, the reliance on Russian tourists is still low in Asia.

Thailand was the largest beneficiary in the region in 2019, receiving 1.4 million Russian visitors, according to the EIU. Still, that accounted for only less than 4% of its total arrivals that year. Vietnam was second, while Indonesia, Sri Lanka and Maldives round up the top five Asian destinations for Russian tourists.

“Without the conflict, however, Russian tourism could have increased in importance, given ongoing curbs on outgoing Chinese travellers,” said the EIU

Rising mortgage rates are clobbering home building stocks. Now may be the time to buy

Few sectors of the stock market have been hit as badly as U.S. home builders this year, as investors worry that rising interest rates will clobber demand for new homes.

The stocks are worth a closer look, though, if you can handle some ugly numbers: D.R. Horton Inc. DHI-N +0.63%increase, Toll Brothers Inc. TOL-N +0.20%increase, Lennar Corp. LEN-N +0.33%increase and PulteGroup Inc. PHM-N +1.04%increase have tumbled an average of more than 30 per cent in 2022.

There’s no mystery behind the dramatic downturn. With inflation bubbling at multidecade highs, bond yields have soared. That has pushed up mortgage rates and raised concerns about housing affordability.

This week’s release of minutes from the Federal Reserve’s monetary policy meeting in March added to the concerns, revealing that Fed officials have been considering aggressive rate hikes of half a percentage point each.

“Barring some really bad economic news in coming weeks, or miraculously good inflation news, the Fed looks to ramp up its tightening cycle,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note this week.

For home builders, which have been coasting on low mortgage rates, the backdrop is challenging. But is the stock market overreacting?

By most accounts, the U.S. housing market is on solid ground. Even as 30-year mortgage rates climbed to 4.9 per cent in March – the highest level since 2018 – the number of mortgage applications actually nudged higher.

Matthew Pointon, senior property economist at Capital Economics, expects that mortgage rates shy of 6 per cent will support mortgage applications.

Housing starts, which measurehome-building activity, are also strong. In February, starts rose to nearly 1.77 million at an annualized pace, an increase of 6.8 per cent from January, and their highest level since 2006.

While confidence among home builders, as measured by the National Association of Home Builders, has declined for four straight months, the level of confidence remains strong. The latest reading is higher than it was in 2019, before the pandemic.

The deep sell-off in home-building stocks this year, then, reflects a sharp deterioration in the housing market that hasn’t happened yet – and might not happen for years.

That leaves a compelling bullish case that rests on strong housing demand, reasonable affordability and cheap stocks.

Daniel Oppenheim, an analyst at Credit Suisse, said in a report this week that the U.S. housing market has been defined by a supply deficit over the past seven years, meaning construction hasn’t been keeping up with demand.

He expects the deficit will remain wide through at least 2025, even with annual housing starts averaging 1.5 million.

Affordability isn’t a problem, either. While monthly mortgage payments as a percentage of household income have risen to 21 per cent, the ratio is not in worrisome territory, Mr. Oppenheim said. The historical average is 17 per cent, and the ratio climbed above 35 per cent during the last boom.

And the cost to rent a home is roughly balanced with the cost to own a home, despite rising home prices.

“This is a key positive and a sharp contrast from the 2004-06 housing boom, when the wide gap between the cost of owning and renting pointed to froth in the for-sale market,” Mr. Oppenheim said in his note.

As for stock valuations, a number of analysts are arguing that the sell-off has left them too cheap to ignore.

Susan Maklari, an analyst at Goldman Sachs, estimated that stocks in the sector trade at about their tangible book value, a substantial discount to the historical average of 1.5 times book value.

In late February, Bank of America analyst Rafe Jadrosich upgraded his recommendations on Toll Brothers and PulteGroup to “buy” after the stocks fell at the start of the year.

“In our year-ahead report, we noted that homebuilders stocks could face a challenging setup with rising interest rates. But valuations are now trading at the low-end of the historical range and the spike in mortgage rates is now already well known to investors,” Mr. Jadrosich said in his note.

The stocks have fallen further since the upgrade, highlighting the risk of buying too soon. But it could make the rebound sweeter if the housing market survives rising rates.

“We continue to see ample evidence from the field that current buyers remain deeply committed to purchasing a home and also have the financial flexibility to adjust to higher rates,” Buck Horne, an analyst at Raymond James, said in a recent note.