Hello and welcome to Alts Cafe
This is a quick-fire look at what’s driving your alts week.
What’s on deck today:
- Tough week for macro-watchers
- Mortgage rates approach 8%
- Trucking companies are going bankrupt
- The move toward private credit continues apace
- The SEC dropped its suit against Ripple
Table of Contents
Macro View
Look at that volatility…again.
Bullish News
- Economists are turning optimistic about the U.S. economy. They now think it will skirt a recession, the Federal Reserve is done raising interest rates, and inflation will continue to ease.
- US retail sales rose 0.7% in September, well above the 0.3% Dow Jones estimate.
Bearish News
- China is preparing to navigate US sanctions if it invades Taiwan.
- The 60-40 investing strategy (60% stocks, 40% bonds) has had its worst year in generations.
Forecasts
Get $25 to play around with invest on Kalshi using this link.
📉
1%
Chance of Fed hikes rates in November
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91%
Chance credit card defaults will rise in Q3
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2.37%
National average house price increase in 2023
Lots of tech layoffs last week, and there’s a Kalshi market for that. Feels like a safe bet to me.
What are we doing?
ALTS 1 Fund news:
No change
Real Estate
Bullish News
- A new federal housing policy will make it easier for some home buyers to qualify for a mortgage by allowing them to include rental income from accessory dwelling units as part of their application.
Bearish News
- As mortgage rates approach 8%, demand is the lowest it’s been since 1995.
- Annual rent growth cooled again, to 3.2%, in September.
- America’s “tornado alley” is getting wider, which will lead to increased insurance costs.
- US homebuilder sentiment is at its lowest in nine months.
- Architecture firms reported a sharp drop in business in September, indicating that the commercial real estate market could experience more pain soon.
- Prima, a PE-backed farmer that is the largest producer of peaches in North America, filed for bankruptcy.
- And Martha Stewart’s indoor farm, AppHarvest, filed for bankruptcy earlier this year.
How to invest in real estate right now:
Don’t buy a peach farm.
Startups
Bullish News
- Fintech Plaid is considering an IPO.
Bearish News
- An AI company reliant on heavy consumer spending is going public via SPAC if you’re looking for something to short.
- Convoy, a trucking startup once valued at $3.8 billion, is shutting down.
- LinkedIn is firing 700 people.
- Because it has seen year-over-year revenue growth slow for eight consecutive quarters.
- But there’s no word if they’re offering the axed employees free access to LinkedIn Premium to help them find a new job.
- Ten out of 13 startups in the latest cohort of Surge, Peak XV’s powerfully influential early-stage program, specialize in AI and other deep tech sectors.
How to invest in startups right now:
Avoid trucking startups
Private Equity and Private Credit
Bullish News
- BlackRock says “tectonic shifts” are underway in US financial markets that will result in private credit funds financing more businesses while some banks struggle to compete.
Bearish News
- EQT is struggling to find buyers for its assets, so it’s trialing a program to offload them to LPs.
- With the economics of PE getting tougher, it’s time to bring in a new type of leader.
- China’s property market meltdown created a multibillion-dollar opportunity for distressed debt investors. It hasn’t paid off.
How to invest in PE and Private Credit right now:
Wait, probably.
Crypto & NFTs
Here’s what you need to know:
Solid week for crypto as an ETF gets closer to reality.
Getting more optimistic.
Even NFTs were up.
Bullish News
- Ferrari has started to accept payment in cryptocurrency in the U.S.
- The SEC dropped its case against Ripple.
- The European Central Bank took a further step on Wednesday towards launching a digital version of the euro.
- Grayscale Investments filed a new registration statement with the Securities and Exchange Commission in its ongoing attempt to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF.
Bearish News
- New York is suing cryptocurrency firms Genesis Global, its parent company Digital Currency Group (DCG) and Gemini for allegedly “defrauding” investors of more than $1 billion.
- Binance’s US unit has halted the withdrawal of dollars
How to invest in Crypto & NFTs right now:
It’s accumulation season.
Quick hits
Collectibles
A long-lost prop from the original 1977 Star Wars film has sold in an auction for a record-breaking US$3.135m.
The prop, a 20-inch model of an X-Wing starfighter that was used in the climactic battle sequence of Star Wars: Episode IV – A New Hope, had been considered missing for decades before it was discovered in a cardboard box in the garage of the Oscar-nominated model-maker Greg Jein. Jein died in May last year at the age of 76.
That’s all for this shortened week
Cheers,
Wyatt
Disclosures
- This issue of Alts Cafe was brought to you by our friends at Perimtec.
- We hold BTC and ETH in our ALTS 1 Fund.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.
