HomeStreet Bank, a Seattle-based lender, is making a significant move to shore up its financial position by selling nearly $990 million of its multifamily commercial real estate loans to Bank of America (BofA).

This strategic decision, announced Friday, aims to propel the bank back to profitability and alleviate the burden of expensive funding sources.

A deal driven by necessity

BofA has agreed to acquire the loan portfolio for approximately $906 million, reflecting a slight discount of about 8% on the loans’ face value.

According to HomeStreet, this discount accounts for “the current interest rate environment and that the loans being sold are primarily lower yielding.”

This transaction marks a critical step for HomeStreet as it endeavors to recover from four consecutive quarters of adjusted losses, and may also ease concerns after regulators blocked its planned merger with FirstSun Capital Bancorp.

The news sent shares of the bank soaring nearly 6% in early trading.

“Entering into this agreement … is the first step in implementing a new strategic plan, which we expect to result in a return to profitability for the bank and on a consolidated basis early next year,” stated HomeStreet CEO Mark Mason, as reported by Reuters.

The proceeds from the sale will be strategically utilized to repay debt taken from the Federal Home Loan Bank, as well as to reduce costly brokered deposits.

These brokered deposits, which carry higher interest rates than core deposits, have been a significant drain on the bank’s resources.

Navigating the commercial real estate landscape

The decision to offload these multifamily commercial real estate loans highlights the challenges that regional banks face in the current economic climate.

These loans, particularly those tied to apartment buildings with more than four units, have come under pressure as higher interest rates have strained borrowers’ ability to repay.

However, large banks like BofA, with their higher capital levels, adequate deposits, and smaller exposure to CRE loans, have been better positioned to withstand such market fluctuations.

Moreover, the market anticipates some relief as the Federal Reserve is expected to cut interest rates, which should ease the pressure on these loans.

A transaction on the horizon

The sale, expected to close before the end of December, will not involve a complete severing of ties.

HomeStreet will continue to service the loans, maintaining a connection to these assets despite the change in ownership.

This move represents a significant strategic shift for HomeStreet as it seeks to regain its footing and establish a more sustainable financial future, and could mark the start of a recovery.

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Brazil celebrates a milestone in job opportunities as the country achieves a record unemployment rate of 6.l% marking a positive trend, in the labour market during the last quarter of 2024 compared to the previous periods 6. 60/0 Rate.

The decrease in unemployment is in line with forecasts, reflecting a promising path towards recovery for Brazil’s economy, according to data published by Brazil’s central bank.

Brazil’s government spending fuels consumer demand

Government spending has significantly boosted consumer demand by boosting consumer confidence and spending habits, which has led to an increase in business operations across sectors due to consumer demand; consequently, hiring prospects have improved, and unemployment rates have been reduced.

Economists think that the government’s smart investments and financial strategies have not just boosted consumer spending but have also set the stage for term expansion.

Brazil’s labour market outlook appears positive due to these ongoing efforts.

Unemployment levels in October

Data from Brazil’s central bank showed that the unemployment rate in Brazil declined to 6.2% in the three months ending October 2024.

The results supported the trend of an improving labour market, reinforcing the case for tighter monetary policy from the Brazilian central bank this year.

However, it increased uncertainties about the policy direction of the new monetary policy committee, which is projected to be more dovish when it takes office in 2025.

The number of unemployed fell by 8% to 6.8 million, while the number of employed rose 1.5% to a new record high of 103.6 million.

Meanwhile, real regular income remained consistent at BRL 3,255 during the quarter, rising by 3.9% year on year.

Employment levels are on the rise as 2024 comes close to an end

Job creation is expected to strengthen more as a result of these initiatives.

The significant drop, in unemployment is mainly credited to the recovery of industries that were previously affected by challenges and external factors.

At the time the overall employment has increased by 1. 4% Hitting a high of 103. 9 Million working individuals.

This expansion signifies a growing job market that not only absorbs those without jobs but also generates employment opportunities that meet the changing demands of the economy.

Rising wages reflect economic improvement

As employment numbers rise wages also see an improvement to reflect the conditions.

The average monthly salaries, in Brazil have gone up by BRL 22 to reach a total of BRL 3​285 per month​.

This rise may be small.

It indicates economic progress and suggests that workers are starting to see the advantages of more job opportunities opening up​.

Rising wages play a role, in improving the lives of Brazilians and can also boost consumer spending​, which in turn benefits the economy through a cycle of positive effects​.

Central bank’s response and future outlook

With the recent improvements, in the job market considered and taken into account by Brazil’s bank officials plan to increase interest rates at the start of the year to combat rising inflation due to economic growth and ensure financial stability.

The expected alterations, in policy could result in lending conditions that might influence the speed of economic expansion.

Many professionals think that Brazil’s economy is robust enough to handle any setbacks due, to its labour market foundations and is well positioned for a sustainable rebound amidst challenges.

The recent decrease in the unemployment rate to an all-time low of 6.1 % indicates Brazil’s resilience and potential for growth.

The country seems to be moving in a direction towards recovery, with government investments growing consumer demand and increasing job opportunities.

Despite the progress made in the economy of Brazil so far and the positive trends observed lately; there are still obstacles to overcome such as concerns, about rising prices and uncertainties, in the economy that loom ahead of us.

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Comscore’s senior media analyst Paul Dergarabedian sees streaming platforms, including Netflix Inc (NASDAQ: NFLX), as complementary not adversarial for movie theatres.  

“I think they all work together; it’s this giant ecosystem,” he told CNBC in an interview on Friday.

That’s part of the reason why NFLX is keeping its own even though the domestic box office has improved rather significantly in recent months.

In fact, the likes of ‘Mufasa: The Lion King’ and ‘Nosferatu’ helped pushed the US cinema revenue to a solid $31.5 million on Christmas Day.

Netflix set streaming records on Christmas Day

Americans flocked to movie theatres in large numbers on Christmas Day.

Meanwhile, the streaming giant Netflix wasn’t sitting on its hands either.

Nearly 65 million people in the US logged into Netflix to watch the two exclusive NFL games on Christmas Day.

Baltimore Ravens versus Houston Texans and Kansas City Chiefs versus Pittsburgh Steelers were actually the most streamed NFL games in the history of the United States, according to Nielsen.

“Bringing our members this record-breaking day of NFL games was the best Christmas gift we could have delivered,” said Bela Bajaria – the chief content officer of NFLX in a press release today.

Netflix stock is currently up well over 90% versus the start of 2024.

Advertisers may prefer Netflix in 2025

Netflix Inc has been fully committed to bringing live sports to its viewers of late.

The Nasdaq listed firm has already secured exclusive rights to broadcast the 2027 FIFA Women’s World Cup and has deals in place with the WWE, boxing1, and NFL as well.

The strategy could prove particularly lucrative in the coming year as advertisers will likely favour media companies with sports rights and live programming in 2025, as per the industry executives.

“Media budgets aren’t growing. So, there’s just more selection into where [advertisers are] spending their money,” Natalie Bastian revealed in a recent interview. She’s the global chief marketing officer at Teads.

Netflix stock does not currently pay a dividend, though.

Is there any further upside left in Netflix stock?

Sports rights and live programming also made up for reasons why Jeffrey Wlodarczak of Pivotal Research raised his price target on Netflix stock last month to $1,100.

His forecast indicates potential for another 23% upside from here.

“Given the success of Tyson/Paul fight, we expect Netflix to accelerate its offerings of eventized live programming, which further enhances its ability to offer households regular compelling content,” Wlodarczak told clients in a research note.  

The Pivotal Research analyst also expects NFLX to opt for a stock split in 2025. While such a move doesn’t augment the company’s underlying value, it makes the stock more affordable for smaller investors, thereby attracting a broader base of shareholders.

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Bernstein analysts expect the wafer fab equipment market to remain “flat-ish” next year after an estimated 10% growth on the back of continued demand from China in 2024.

Still, the investment firm likes two European semiconductor stocks: BE Semiconductor Industries NV and Infineon Technologies AG for the coming year.

Here’s why Bernstein is bullish on the aforementioned European stocks and what each of these has in store for investors in 2025.

BE Semiconductor Industries NV (AMS: BESI)

BE Semiconductor or “Besi” as it’s broadly known is a semiconductor assembly equipment company based out of the Netherlands.

Bernstein analysts see an opportunity in the share of this Dutch firm as they’re currently trading at a discount. BESI is down more than 25% versus its year-to-date high at writing.

The investment firm dubbed BE Semiconductor a “top pick” for 2025 in its research note, saying the company continues to be a “very attractive fundamental story”.

Bernstein agreed that investors will need to be patient with BESI but remained confident that “both [cyclical recovery and hybrid bonding] will contribute to growth” moving forward.

In October, BE Semiconductor reported a 27% year-on-year increase in its quarterly revenue on the back of solid demand from computing end-user markets.

The Dutch firm improved its net income by more than 33% as well due to more controlled operating expenses.  

BE Semiconductor stock currently pays a dividend yield of 1.61% which makes up for another great reason to own it for the long term.

That’s why Wall Street agrees with Bernstein’s outlook. The consensus rating on BESI currently sits at “overweight”.  

Infineon Technologies AG (ETR: IFX)

IFX has been a big disappointment for its shareholders over the past six months but Bernstein analysts expect that to change in 2025.

Infineon is Europe’s largest chipmaker that supplies a range of semiconductor technologies to Apple Inc. According to Bernstein:

Indicators are now pointing to nearing the trough of the cycle, thus increasing the likelihood of a strong re-rating for IFX. That, combined with secular growth drivers, makes them our top pick among IDMs.

Bernstein is bullish on Infineon stock even though its revenue was down about 8.0% on a year-over-year basis in its fiscal 2024.

That’s because IFX plays a significant role in powering the AI data centres. That makes it a notable play on the artificial intelligence market that Statista forecasts will grow at a rapid pace and be worth $1.0 trillion within the next 10 years.   

Infineon Technologies expects its AI revenue to top $500 million in fiscal 2025 and roughly double from there over the next two years.

Much like BE Semiconductor, IFX shares also currently pay a dividend yield of 1.10% which makes them more attractive for income investors.

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Rigetti Computing (RGTI) continued to rise spectacularly on Friday, with shares seen increasing by more than 13% to $17.53 during morning trading.

The gain follows a record close at $15.44 on Thursday, marking the fifth consecutive session of gains for the quantum-computing services company.

Rigetti’s shares have skyrocketed more than 1,794% this year, a movement that has placed the company for its best annual performance on record.

The surge is a significant comeback for a stock that, until mid-December, had remained below $1 for extended periods.

Rigetti, which debuted on the Nasdaq in March 2022 after a SPAC merger, initially reached highs of $11.37 but struggled to regain those levels until this year’s rally.

Now, as it continues its rally, the stock may hit another all-time high on Friday.

Rigetti rises as part of a broader rally in quantum computing stocks

Rigetti’s unprecedented rise reflects the broader rally being witnessed by quantum computing stocks, and investor enthusiasm for the sector.

The share price of Quantum Computing (QUBT) climbed by 6.4% before losing the gains and slipping into the red, while D-Wave Quantum (QBTS) gained 2.53%.

QUBT has gained more than 2,006% YTD.

Quantum Corp. (QMCO) and Quantum-Si (QSI) surged by 6.2% and 68.9%, respectively.

What’s driving market excitement for Rigetti is its ambitious technological roadmap.

The company plans to deploy a 36-qubit system by mid-2025, using its proprietary superconducting qubit technology, which offers gate speeds of 60 to 80 nanoseconds—far outpacing competitors.

A larger, 100-plus-qubit system is also planned for later in 2025.

Analyst forecasts for the quantum computing market

Rigetti’s Q3 revenue remained modest at $2.4 million, but the company’s $92.6 million cash position provides a solid foundation for executing its vision.

Analysts see quantum computing as a transformative technology with vast potential, supported by McKinsey’s forecast that the market could reach $45 billion to $131 billion by 2040.

With its recent achievements and ambitious plans, Rigetti is emerging as a leader in a rapidly expanding field, signalling a bright future for quantum computing innovation.

Former Rigetti executive sells into its strength

Rigetti’s strong rally prompted at least one investor to sell into its strength.

Former General Counsel of Rigetti, Richard Danis sold 624,262 shares in December, earning $4.7 million, according to filings with the Securities and Exchange Commission.

His transactions included a sale of 233,423 shares on Monday, Dec. 23, for $2.6 million at an average price of $11.03 per share.

Danis had also indicated plans to sell an additional 250,000 shares at $11 per share, a transaction that would net $2.8 million.

Danis resigned from his role on Nov. 30, and Rigetti confirmed to Barron’s that his post-resignation consulting agreement was terminated by mutual agreement earlier this month.

Should you sell too?

According to Crispus Nyaga, financial analyst at Invezz, there are compelling reasons to sell quantum stocks like RGTI, QSI, and others. He says,

The first major reason to sell quantum computing stocks like Rigetti Computing, Quantum Corporation, and IONQ is that major themes often don’t work out in the long term. This performance is mostly because the market is usually driven by fear and greed.

Nyaga has compared the current sentiment to the initial surge seen in cannabis and electric vehicle stocks which plunged after seeing a hype.

Secondly, according to Nyaga, the Wyckoff method shows that stocks will crash due to a concept called mean reversion.

“This situation is where stocks and other assets drop and return to their mean levels after a strong surge.

This means the reversion concept has recently worked well in the crypto industry.”

Additionally, their stocks have become highly overbought as their Relative Strength Index (RSI) and Stochastic Oscillators have soared, he says, adding stocks often retreat when they become highly overbought.

Lastly, he says, quantum computing stocks will crash because their valuation metrics have become highly stretched in the past few months. 

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