The spotlight is on the Federal Reserve again... We could see more volatility ahead... Housing check-in... 'Delistings' are soaring... This corner of the real estate market is setting up an opportunity... Mailbag: The trouble with PBMs...
It's another Fed week...
All eyes and ears will be on Federal Reserve Chair Jerome Powell this Wednesday, when he steps up to the podium for a press conference following the central bank's two-day policy meeting.
After some market uncertainty early last month, the Fed is now widely expected to announce a 25-basis-point rate cut – its third in the second half of 2025.
The market would likely react with surprise and volatility if the Fed doesn't lower rates again, given recent signals from "dovish" Fed officials. Fed-funds futures traders have 89% odds on the Fed lowering rates.
However, Powell left the door open for the possibility of a rate-cut pause with his "no comment" on monetary policy during a speaking appearance last week. We also heard from several "hawkish" Fed officials last month following a late October meeting with "strongly differing views" voiced.
With the labor market continuing to weaken, we see many other signals of stress in the "real" economy... And there are signs that the pace of inflation is picking up again.
It's a "stagflationary" environment with no easy solutions for simultaneous growth and "affordability" (which seems to be the latest buzzword for inflation). But Mr. Market doesn't necessarily care about that right now. Based on current expectations, lower rates will be welcomed in the short term.
However, there's another reason we could see some volatility later this week. If the Fed does cut rates, the mainstream financial media will assuredly focus on "what's next?"
During this month's Fed meeting, its members will predict GDP, inflation, and interest rate policy for the year(s) ahead.
With concerns about the pace of inflation (still closer to 3% than the Fed's supposed 2% goal), it's possible the Fed will signal a possible rate-cut pause ahead, at least until Powell steps down in May. So even if we see a rate cut, be prepared for some potential volatility ahead.
In the meantime, another sign of a slowdown...
The residential real estate market remains stuck in neutral.
Despite the Fed lowering interest rates twice since August and mortgage rates coming down compared with 2024, the average 30-year mortgage rate still remains above 6%... And financing costs haven't been low enough to unlock homebuying and selling activity.
Now, even housing that is going on the market is coming off at an increased rate.
According to Realtor.com's November 2025 housing trends report, delistings in the U.S. were up 45% year over year, up from an almost 38% year over year rise in October... Home sellers simply aren't finding willing buyers with current prices and financing costs.
As we've written before, housing supply and demographics play major roles in the residential real estate market, but affordability is also a driving factor in this dynamic. And today, sellers are increasingly more willing to take their properties off the market entirely than cut prices to find a willing buyer – and generate less capital from a sale. From Realtor.com...
"The delisting trend is a perfect personification of the stagnant and frustration-filled housing market," says Realtor.com senior economist Jake Krimmel. "With buyers and sellers far apart, the sellers' solution is to pull that trump card and delist, rather than cut prices."
In an ironic twist, Krimmel notes, this "emergency exit" for sellers actually keeps the market stuck in a rut by shrinking the inventory, putting upward pressure on prices, and in the process sending both buyers and sellers back to square one.
Delistings began surging over the summer, with the Miami market topping the list of delistings relative to new listings in each of the past five months. Denver and Houston came in second and third in November.
Meanwhile, Realtor.com's report showed that a handful of smaller metropolitan areas like Grand Rapids, Michigan, St. Louis, and Cleveland – which it describes as "refuge markets" for their affordability – have seen some of this year's best price gains.
Realtor.com's report discussed people moving from higher-priced markets to these smaller markets because it's where people can find the most affordable housing. Our director of research, Matt Weinschenk, touched on this subject in his latest This Week on Wall Street report on Friday...
When it comes to housing prices, well... it's insane out there.
My colleague Josh Baylin recently asked a successful longtime mortgage broker how young people are getting into the housing market.
The two were playing a round of golf on the championship La Costa golf course in beautiful – and expensive – Carlsbad, California. For dozens of miles around, starter homes cost more than $1 million.
The mortgage broker's answer was simple: "They're moving."
"What 35-year-old, starting a family, has saved up $300,000 for a down payment on a home?" he added.
That's an extreme example, of course. (And California is widely known for having the highest housing costs.) But it's the same story all across the U.S.
In short, activity in residential real estate is largely frozen. But you might have better results looking elsewhere in the sector.
It's not all bad news...
In This Week on Wall Street, Matt takes on one of the biggest questions facing Americans today: Can anyone afford a house anymore?... and offers another way to think about, and invest in, real estate as prices continue to rise...
Instead of talking about flipping houses or becoming a landlord, Matt walks through a simpler way to benefit from today's environment: investing in real estate investment trusts ("REITs") right from your brokerage or retirement account.
This corner of the real estate market is finally showing signs of life, and, for those paying attention, it's setting up a huge opportunity.
Matt is joined by Wide Moat Research's Brad Thomas, a 30-year-plus real estate veteran and former real estate developer, for a discussion about the massive opportunities in REITs right now.
Brad explains exactly what REITs are and how they work... why they might be ready to rally... shares his favorite sector within the sector... and three of his favorite investments right now.
You can hear more details from Matt and check out his entire conversation with Brad for free right here on Stansberry Research's YouTube page... and you'll hear more information about one additional big real estate deal that Brad has his eyes on today.
New 52-week highs (as of 12/5/25): Alpha Architect 1-3 Month Box Fund (BOXX), Coca-Cola Consolidated (COKE), Pacer U.S. Cash Cows 100 Fund (COWZ), EnerSys (ENS), Expeditors International of Washington (EXPD), Fanuc (FANUY), Freehold Royalties (FRHLF), Lumentum (LITE), Mueller Industries (MLI), VanEck Morningstar Wide Moat Fund (MOAT), Robo Global Robotics and Automation Index Fund (ROBO), SandRidge Energy (SD), and Skeena Resources (SKE).
In today's mailbag, thoughts about pharmacy benefit managers ("PBMs"), stemming from subscriber S.R.'s report last week about their small pharmacy's challenges... Plus, we have feedback on Dan Ferris' Friday essay, and an astute observation... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"I read that S.R. may not make it through the year in their pharmacy. I once owned 67 pharmacies outright and 20 more with partners and I can tell you with 100% assurance [they are] suffering not because of pullbacks but because the reimbursements [they] receive from [their] PBMs is well below what [they] need to survive.
"I sold all but one store near my hometown because of this.
"More than half of all brand name drugs are reimbursed at LESS than cost and the average cost is well over $300. You can't make money when your highest dollar transactions are at a negative margin. PBMs are real issue to high health care costs. They make all the money and provide no value-added service.
"The brand manufacturers are extorted to pay the PBM's big fees when their drugs are dispensed. If they don't pay, they are not covered. The pharmacy fills the script for nothing or next to nothing. Until PBMs are regulated, thousands of independent drug stores will close right along with the thousands of store closures from the big chains." – Subscriber Bruce G.
"Tim L. commented [in Friday's mail] that 'I feel deeply for S.R. My father owned a small pharmacy in Indiana. He was very successful and very fortunate to sell the business and retire before the large pharmacies invaded the market.'
"It is not the fault of large pharmacies that small businesses are being squeezed. The true blame lies primarily with the PBMs. They 'negotiate' the contracts that dictate reimbursement rates that are so low that pharmacies lose money on some transactions. In the process, they retain much of the money they claim to 'save' the insurance (and ultimately, the insured) companies. The primary reasons large pharmacies can survive are:
- They offer less professional service (less time to talk to patients)
- They supplement their revenue with a much broader and deeper sales volume of 'other' items
- They don't offer free ancillary services like personal accounts or delivery services that reduce profitability
- They concentrate Rx business expenses, such as advertising, accounting, and other support services and spread those expenses across multiple outlets
"I know, because I retired from one of those large pharmacies." – Subscriber Mike M.
Corey McLaughlin comment: Thanks for the notes. It's interesting – and telling – that they independently arrived in our inbox from two people who clearly have first-hand experience with the subject and point to the same issues.
According to the American Medical Association ("AMA") and reports from the Federal Trade Commission and the House of Representatives, just a handful of PBMs control this part of the health insurance business. The AMA president wrote in August...
Just four PBMs had a 67% share of the national market in 2023. OptumRx, CVS Health, Express Scripts and Prime Therapeutics dominate the field. Seventy-nine percent of PBM markets were deemed "highly concentrated" by federal antitrust standards. In other words, competition is low—and patients can pay the price.
"Dan, Thanks for the great overview today 'I'm not going to miss out... 'I sent it on to my children to read. Just two questions from a chemist, not economist to ponder.
"1- When the government bails out a failing company, they are picking a winner. When they take an equity stake, they are creating a winner.
"2- Is a Trump account better or worse than Social Security as a forced retirement savings plan for the American youth. I detested Al Gore, but I liked his 'Lock Box.'
"Continued investing success to you and your readers." – Subscriber Mike D.
"Is it just me, or does no one else see a certain irony here, with your recent mention of the staffing and consulting firm Challenger, Gray & Christmas [in the report about layoffs last week]. Just in the St. Nick of time... so to speak." – Subscriber Chuck B.
McLaughlin comment: Puns are heavily discouraged around here, but now that you mention it...
All the best,
Corey McLaughlin with Nick Koziol
Baltimore, Maryland
December 8, 2025
