It turns out that in Las Vegas, the house doesn’t always win.

At least, not in this real estate market. Once branded a “pandemic boomtown,” Sin City recently experienced the largest drop in home prices of any major city across the country, falling 1.9% year-over-year, according to the latest figures from the S&P Cotality Case-Shiller Index. What happens in Vegas isn’t staying in Vegas: Many of the places that became popular during the COVID-19 shutdowns, such as Austin and Boise, have watched their housing markets flatten or reverse in the years since.

The pricing turnaround in these Sun Belt favorites points to a larger trend. For many Americans, houses are just too expensive. Ultra-low borrowing costs seen during the pandemic are officially a thing of the past, but inflation is still high, making it difficult for people to afford mortgage payments on top of groceries, gas and other essentials. Wall Street will be closely watching earnings reports from Zillow, Rocket Companies (parent of Rocket Mortgage) and Opendoor this week for insight into the housing market.

Stacked Deck

In today’s K-shaped economy, plenty of luxury housing markets are doing fine. Atherton, a residential town in Silicon Valley that’s been attracting wealthy techies, recently surpassed Miami’s Fisher Island as the most expensive ZIP code in the US. Tack on the fact that first-time home buying recently dropped to a record low, and there’s a clear divide between Americans constrained by borrowing costs and Americans who aren’t.

Meanwhile, housing inventory, a lack of which has long been weighing on the US housing market, is finally ticking up. But the houses hitting the market aren’t ones that the typical American can afford. Middle-income households earning roughly $75,000 annually can only access about a quarter of listings, according to a recent report from the National Association of Realtors and Realtor.com.

Enter homebuilders:

• Major national homebuilders like D.R. Horton and Lennar can sweeten the deal of building a home instead of buying an existing one by offering incentives like mortgage-rate buydowns. They can also build smaller homes on less expensive land. The National Association of Home Builders (NAHB) reported that in the first quarter of the year, the median price of a new single-family home was $1,400 lower than that of an existing home.
• As with many aspects of the housing market, it’s not necessarily a clear-cut story. Economic uncertainty and affordability concerns are still weighing on builder confidence.

Playing the Cards Right: D.R. Horton’s fiscal third-quarter results illustrate the mixed state of the housing market. While the homebuilder reported higher-than-expected earnings, it also cut its forecast, citing affordability constraints. The company’s rival Lennar cut its full-year target for home deliveries, noting geopolitical uncertainty and high interest rates.

They’re a picky bunch on Wall Street lately. Will Palantir, when it reports its latest quarterly results this afternoon, have enough good news? Despite a better-than-expected $1.6 billion revenue haul in the first quarter, an 85% year-over-year gain, shares in the software and data analytics giant have tumbled 31% in 2026.

An aggressive second-quarter sales forecast of $1.8 billion, representing an 80% increase, couldn’t summon the momentum to escape this year’s protracted selloff of software holdings, either. Whatever today’s result, options pricing suggests traders expect a dramatic swing of up to 10%. So strap in.

American Brand

Best known for its Gotham platform, built for government, defense and intelligence organizations, the company boosted US government revenue by 84% year over year to $687 million in the first quarter. There’s also Palantir’s commercial side, where its Foundry operating system and Artificial Intelligence Platform provide tools to help companies manage their data operations. In the same three-month period, US commercial revenue surged by 133% year over year to $595 million.

Bears look past those numbers to a Mauna Kea-sized price-to-earnings ratio of 137, a valuation that, to them, simply doesn’t add up. RBC Capital questioned last week whether the company can “sustain its current growth trajectory.” Notably, they flagged OpenAI, Anthropic and other AI companies angling to win more government and defense contracts, which would potentially dent market share. “We struggle to underwrite a scenario that justifies current valuation levels,” the bank’s analysts wrote, with their $90 price target implying a 27% downside on the stock.

Meanwhile, bulls see Palantir’s US momentum as so strong that it can overcome concerns overseas:

• For example, Germany and France recently pledged to explore developing an alternative to Palantir’s defense software. The domestic intelligence agencies in both countries recently opted to contract with French rival ChapsVision over Palantir, with French Prime Minister Sébastien Lecornu calling it necessary to avoid a “strategic dependency” on US-controlled systems.
• In an earnings preview, Morningstar said that while European growth would be nice, it might not ultimately matter, even though “European growth would be a massive accelerant to the upside and make the valuation math work a lot better.”

No, Non, Nein: Last week, the Green Party in the German state of Baden-Württemberg voted to reject the use of Palantir software. On Friday, lawyers representing London Mayor Sadiq Khan told a UK court his office blocked the city’s police force from signing a two-year, $67 million deal with Palantir because it wasn’t fully briefed on the procurement. Thankfully, Uncle Sam still wants you, Gotham.

A lawsuit from 12 state attorneys general led by California has Paramount’s acquisition of Warner Bros. Discovery officially stuck, to use show biz parlance, in “development hell.”

The merger is now on hold as the two sides prepare for a full-blown antitrust trial, though when it will occur is an open question; Paramount is pushing for a November trial, according to a Wall Street Journal report last week, while the states are arguing for it to start early next year. For Paramount father-son overlords Larry and David Ellison, time is now money, and central to the trial will be the residual effect of something from the analog past: cable TV.

Of Paramount Importance

Everyone involved has the date June 4, 2027, circled on their calendars. If the deal is not complete by then, according to a Puck report last week, WBD CEO David Zaslav can contractually call it off and collect a $7 billion termination fee from Paramount (Zaslav, we can imagine, regularly checks an already-ticking countdown clock). Even if the deal is eventually finalized, Paramount will still owe WBD a $650 million “ticking fee” per unconsummated quarter if the transaction isn’t completed by Sept. 30.

To avoid handing over the $7 billion check, Paramount will have to successfully disprove the states’ central argument: that the merger will give the combined company undue control over the cable and pay-TV landscape:

• After the merger, Paramount would have control of a sector-leading 27% of all cable affiliate fee revenue, the states have claimed. That’s enough, they argue, to give the company undue power when negotiating with cable companies and pay-TV distributors.
• Paramount’s legal brass is already arguing in the court of public opinion that the cable market is shrinking and thus largely irrelevant in a world dominated by streaming and social media.

Pass or Fail: Whether the “failing market” argument will carry weight is uncertain; a Guggenheim analyst wrote last week that there is some legal precedent for the claim. Still, cable may have finally reached its bottom. Charter said during its earnings call last month that it lost only 1% of cable subscribers in the past year. Cable-like service YouTube TV continues to grow and is on track to soon be the largest pay-TV player in the game.