Franklin Finance Fridays: 04/25/2025
Not everything is mainstream...
All,
“Society honors living conformists and dead non-conformists.” We love the irony. This week serves as another reminder that real impact is rarely measured in short-term applause. Long-term, positive thinking requires resilience, patience, and a commitment to implementing better benchmarks for growth, not just recognition. As we close out another month, it is a good time to reflect, reset, and stay focused on building with intention, even when the results are not immediately visible. It is like swimming from shore to shore, it is often in the middle of the ocean that people feel most lost. Keep swimming.
Home sales fell 5.9% in March, the biggest monthly drop since late 2022. High mortgage rates and home prices are making it harder for buyers to afford homes, which has weakened demand even though inventory is rising. The sales decline was much worse than economists expected and dashed hopes for a spring market rebound. Many sellers who had been waiting for better conditions are now listing, but buyers are cautious due to rising economic uncertainty and concerns about a possible recession. Home prices nationally are still climbing because inventory remains below prepandemic levels, but prices are falling in some Texas and Florida markets. Buyers now have more negotiating power, with nearly one in four listings on Zillow seeing a price cut. Some buyers are benefiting from the slowdown by getting concessions like help with closing costs. Even though more homes are available, mortgage rates stuck between 6.5% and 7% continue to limit affordability. Conditions vary by region, but overall, the market remains challenging.
FUE: Rinse and repeat news.
Paramount Global is in discussions with the FCC about steps needed to secure approval for its merger with Skydance Media. One proposal includes Paramount agreeing to limit certain diversity initiatives, a move encouraged by FCC Chairman Brendan Carr. The merger review has dragged on for months, complicated by a third-party complaint about CBS’s editing of a Kamala Harris interview and a separate lawsuit from President Trump. Paramount is also preparing for mediation with Trump over the lawsuit, which alleges biased editing by CBS and seeks significant damages. Shari Redstone, Paramount’s chair, supports settling with Trump to help the merger move forward, but internal concerns exist over possible legal risks if a settlement is perceived as improper influence. Meanwhile, CBS News leadership changes and internal disagreements add more complexity. The FCC insists its review and the Trump lawsuit are separate matters, but both are creating headwinds for the merger.
FUE: Separate, but equal.
The Trump administration has created a new framework to speed up its tariff negotiations with key trading partners. The U.S. Trade Representative's office developed a template that covers topics like tariffs, non-tariff barriers, digital trade, and economic security. About 18 countries are expected to negotiate under this plan over the next two months, with talks happening in staggered groups of six. Nations that do not reach a deal by the July 8 deadline could face new tariffs unless the pause is extended. Some countries, such as India, are already making progress, while others like Mexico, Canada, and China are on different negotiation tracks. Europe and the United Kingdom have set limits on what they are willing to negotiate, especially regarding agricultural and safety standards. Despite the organized framework, some partners say they are still waiting for specific U.S. demands. The administration insists the process is clear and ongoing, although the timeline could slip if talks stall.
FUE: The waiting game drags on. Kick the can down the road.
Elon Musk’s close associates, including Antonio Gracias and others, have built a lucrative side business selling private stakes in Musk’s companies like SpaceX, xAI, Neuralink, and the Boring Company. Gracias recently offered $1 billion in shares to wealthy investors, profiting through management and performance fees. SpaceX’s valuation has skyrocketed, nearly 30-fold since 2015, while the company has stayed private to avoid public financial disclosures. To limit its number of shareholders and maintain secrecy, insiders use special-purpose vehicles (SPVs) to sell shares indirectly. These insider-led deals yield major profits and fees, often benefiting Musk’s friends and former business partners. SpaceX’s growing value, especially through Starlink and government ties under the Trump administration, has further fueled demand. Other Musk associates like Luke Nosek, Josh Berman, and Justin Fishner-Wolfson have also profited by offering access to Musk’s companies. Maintaining tight control over who can invest has kept SpaceX shielded from broader market scrutiny.
FUE: I am still left shocked by the level of back door deals being flaunted.
Following Pope Francis’s death, Catholics around the world are debating the future direction of the Church. Liberals hope the next pope continues Francis’s reforms and emphasis on social justice, while conservatives want a return to traditional values and clearer doctrine. Many mourners in Rome expressed desires for a pope who will address long-standing issues like sexual abuse scandals more forcefully. Some Catholics are calling for greater inclusivity, such as welcoming LGBTQ+ members and rethinking celibacy rules, while others argue for preserving traditional teachings. The nationality of the next pope is also being discussed, with some Italians hoping for an Italian pontiff to reconnect with the country’s youth. Cardinals are preparing for a conclave to choose the new pope, expected in early May. Overall, the Church faces a crossroads between modernizing and reinforcing its historic identity.
FUE: Rest in power. One of the most defining figures in Catholic history.
The Trump administration is pushing Japan and South Korea to formally commit to the $44 billion Alaska LNG project, which would export liquefied natural gas from Alaska to Asia. A Trump-backed group, the National Energy Dominance Council, is seeking to hold a summit in Alaska on June 2, hoping to announce letters of intent from both countries, similar to Taiwan’s recent agreement. The project plans to build an 800-mile pipeline from northern Alaska to the southern coast, offering a faster and cheaper LNG route to Asia compared to Gulf Coast exports. However, Japan and South Korea have been hesitant due to the project’s high costs and uncertainty about its viability. Trump has made bold claims about the investment interest, but private-sector commitment remains a major hurdle. The project is central to Trump’s broader effort to boost U.S. fossil fuel exports and reduce reliance on traditional energy suppliers. Despite pressure, any agreements from Japan and South Korea would likely include exit clauses if the project’s economics do not improve.
FUE: Look into how Trump’s multi-billion dollar investment deal with Taiwan’s Foxconn in Wisconsin turned out. This feels like more of the same.
Consumers are pulling back on spending due to growing economic anxiety, which is starting to hurt major companies like PepsiCo, Chipotle, and Procter & Gamble. PepsiCo cut its full-year profit forecast, citing softer consumer demand and rising costs from Trump’s new tariffs. Revenue and net income both fell last quarter, and executives noted a shift in consumer habits toward cheaper snacks and smaller portions. Chipotle also lowered its outlook, linking slower sales to economic uncertainty and higher food costs from tariffs. Procter & Gamble reported similar trends, with shoppers even scaling back on basic household goods like detergent. Airline companies like American Airlines are seeing a slowdown too, especially in domestic leisure travel. Overall, a sharp drop in consumer confidence, new tariffs, and political volatility are making Americans more cautious about their spending, signaling wider economic concerns ahead.
FUE: They are packing more lunches.
Florida’s condo market is facing a crisis as skyrocketing costs, driven by soaring insurance rates, special assessments, and tougher financing conditions, are pushing many owners to sell. Older condos are hit hardest, with prices for buildings over 30 years old falling 22% in the past two years, partly due to new structural inspection requirements after the 2021 Surfside collapse. Financing has become harder as more than 1,400 Florida condos are blacklisted by Fannie Mae. Many owners are struggling to sell their units, with some forced to rent them out or pull from retirement savings. Meanwhile, state leaders, including Governor Ron DeSantis, are seeking legislative solutions to ease costs. Despite resilience in newer buildings, the overall market remains strained, especially for aging properties burdened by expensive repairs and compliance demands.
FUE: The insurance risk is a factor that will be a continued conversation in 2025.
Home Depot’s spring trials, a private showcase of new plants, are central to its $20 billion garden business. Gardening now generates more revenue for Home Depot than appliances, lumber, or paint, making it a rare growth area as other divisions slow. The company tests plants in 25 gardens across the country, selecting those that are more resilient, colorful, and easier for customers to grow. Only about 40 to 50 plants are chosen each year after months of evaluation. Spring trials help Home Depot build customer loyalty by improving the odds of gardening success. New standouts like heart-patterned Amore petunias and heat-tolerant petunias reflect how Home Depot is shaping what American gardens will look like each season.
FUE: Standing out matters. Mastery of your craft makes it even better.
Chipotle plans to open its first restaurant in Mexico in early 2026 through a partnership with Mexican operator Alsea. This move marks a significant step in Chipotle’s international expansion, following earlier growth into the Middle East with Alshaya Group. Despite the excitement, analysts warn of challenges, noting Taco Bell’s past struggles entering the Mexican market. After the announcement, Chipotle’s stock fell while Alsea’s rose, reflecting mixed investor reactions. The expansion comes as Chipotle deals with inflation pressures and potential impacts from U.S. tariffs. Alsea, which operates brands like Domino's and Starbucks, sees this as a way to diversify its portfolio. Chipotle currently runs over 3,700 locations and plans to open up to 345 new restaurants globally this year. Analysts are awaiting more details on the Mexico plans, including pricing and location strategies.
FUE: I am curious to see if they can overcome the same challenges Taco Bell experienced in their entrance into this market.
Have a great weekend.
Best,
Franklin
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.