Hello and welcome to Alts Cafe
[Remember, I’m off on holiday the next couple weeks, so you’ll be treated to two special issues of Alts Cafe while I’m away.]
This is a quickfire look at what’s driving your alts week.
TLDR:
- Consumers keep consuming
- The US residential property market has ground to a halt
- IPOs are back, but they’re tanking
- A way to bet against armageddon
- Is Worldcoin a scam?
Table of Contents
Macro View
The market was mixed last week despite a record run by the Dow Jones.
Bullish News
- Equities continue to pump despite lots of signs pointing to a recession.
- US GDP grew 2.4% on the quarter, beating estimates.
- U.S. consumer confidence increased to a two-year high in July.
- MasterCard quarterly earnings showed consumers continue to spend. LikewiseVisa’s.
- But equities investors are dumping stocks with significant exposure to consumer spending.
- More people are entering the jobs market, which should bring unemployment up — which could bring rates down.
- The US Dow Jones index was up 13 days in a row, the longest streak since 1987.
Bearish News
- As expected the Fed hiked rates 25bps.
- U.S. business activity slowed to a five-month low in July.
- US junk bond downgrades hit their highest level since Covid.
- The UK is running the highest debt interest bill in the developed world.
What are we doing?
ALTS 1 Fund news:
Nothing here
Real Estate
Bullish News
- Austin, Texas has cut the minimum lot size for single family homes in half.
- US home prices are now just 0.9% below their peak.
- There are forecasted to be 3,600 distressed CRE deals to be had over the next two years.
- There are plenty of buyers for them.
- Around 13% of commercial loans come due between now and 2027. That’s either bullish if it’s fewer than you expected, or bearish if it’s more.
- Office demand in SF is up 10% (from a very small base) thanks to the AI boom.
- The US government is giving $8.5 billion in rebates to companies and home owners that improve energy efficiency. Qualifying categories include insulation, heat pumps, and efficient appliances.
Bearish News
- Evergrande, China’s hugely indebted property developer, lost $81 billion over the last two years.
- Yields on commercial mortgage bonds are approaching 11%.
- REIT redemptions were $4.5 billion in Q2 (291% of fundraising).
- Existing home sales in the US fell to a fourteen-year low.
- And the luxury market is no longer immune.
- Looking to avoid high rates, some home buyers are getting loans from the property sellers.
How to invest in real estate right now:
Who wants to invest in a fund that buys old homes, puts in insulation, heat pumps, and efficient appliances and flips them?
Startups
Bullish News
- Crunchbase thinks tech layoffs may have peaked.
- UK app developers have brought a $1 billion lawsuit against Apple to reduce app store fees.
- US IPOs continue to tick up and are set to beat 2022 numbers.
Bearish News
- Following Uber’s lead (three years later), lyft is trying to offload its e-bikes division.
- Sequoia fired some more people.
- Startup M&A activity is the lowest it’s been for a decade.
- Sequoia is slashing two funds, including its crypto fund.
How to invest in startups right now:
Semi-conductors, baby.
Crypto & NFTs
Here’s what you need to know:
A mixed week.
Bang average.
Holding steady
Bullish News
- Worldcoin, the eye-scanning blockchain project co-founded by OpenAI CEO Sam Altman, launched its cryptocurrency on Monday. Users queued up by the thousand.
- But there were allegations many of those in the queue were paid actors
- But the UK is already investigating on privacy concerns
- Indonesia has launched a national crypto asset bourse.
- Binance is expanding into Japan.
- An NFT project featuring legendary comic-maker Stan Lee sold out immediately.
- The American Congress is trying to pass a bill to regulate stablecoins
Bearish News
- The SEC may appeal the recent Ripple ruling, which would send alt coins in particular into a tailspin.
- Binance, like Sideshow Bob in a field full of rakes, withdrew its application for a crypto license in Germany.
How to invest in Crypto & NFTs right now:
It’s accumulation season.
That’s all for this week. I hope you enjoyed your coffee and this edition of Alts Cafe. ☕
Cheers,
Wyatt
Disclosures
- This issue of Alts Cafe was brought to you by our friends at VantagePoint and Kalshi.
- We hold BTC and ETH in our ALTS 1 Fund. Apart from those, we don’t own any other assets or vested interests in the companies mentioned in this email.
- There are a couple affiliate links above. If you click them, we may get a couple bucks.
