Hello and welcome to Alts Cafe
[Remember, I’m off on holiday week, so you’ll be treated to a special issue focussing on climate change’s impact on residential real estate]
This is a quick-fire look at what’s driving your alts week.
TLDR:
- Consumer sentiment continues to rise in the US
- Lending is getting tighter
- Chinese real estate is in Big Trouble
- Indian startup investing is down 75% YoY
- The Ripple ruling might be in trouble
Wyatt
Table of Contents
Macro View
Rough week the US got Fitch slapped by the ratings agency, losing its AAA status.
Bullish News
- Annual U.S. inflation rose at its slowest pace in more than two years in June.
- US consumer sentiment rose in July to the highest since October 2021 as inflation continued to ease. Pundits agree things are pretty good.
- The NASDAQ was positive for the fifth straight month in July.
Bearish News
- Credit ratings agency Fitch downgraded the US from AAA to AA+
- And NASDAQ posted its worst day since February while the S&P saw its biggest daily loss since April.
- US job openings fell to its lowest level since April 2021 in June.
What are we doing?
ALTS 1 Fund news:
Nothing here
Real Estate
Bullish News
- Mortgage payments have been flat for the last three months (down 0.1% last month)
- Immigrants could save American homeownership.
- Strip malls are the new self-storage facility.
Bearish News
- US residential mortgage lending is getting tighter, which will further depress demand.
- Blackstone’s $68 billion flagship property fund is holding a fire sale in order to meet redemption requests and fund the purchase of AI data centres.
- The wage gap between various US metros is at its widest point ever with Philadelphia seeing a 6.6% YoY growth compared to only 2.6% in Houston.
- Chinese home sales are down a third year over year.
- Possibly because Chinese millennials spent 46% more on Starbucks lattes this year.
- Chinese property manager Evergrande Services plunged $1.6 billion when trading resumed Wednesday.
- Property insurance prices in Florida continue to climb. Rates are up 28% YoY in Miami.
- And the city faced its first net migration loss in decades.
- Salt Lake City is in the top five for both property tax increases and home insurance hikes YoY.
- Foreign purchases of US homes was down for the sixth straight year
- But last year’s 14% decline was lower than the overall purchase rate in the US.
- Local shopping malls continue to be worth much less than they used to be.
- The US construction industry needs 650k workers to keep up with demand; their lack is slowing down project completion and increasing prices.
How to invest in real estate right now:
Read next week’s Special Edition on how to invest in residential real estate against the apocalyptic spectre of global climate change (it’s not all bad news).
Startups
Bullish News
- Uber has now lost a bit less than $32 billion. Shares were down on the news.
- Goldman thinks AI investments will top $200 billion by end of 2025. Surprised we’re not there already.
- Vietnamese EV maker VinFast will IPO in the US at a $23 billion valuation via SPAC.
- North American banks are winning a global race to transform banking into an AI-first industry.
Bearish News
- Funding for Indian startups was down 75% YoY in the first quarter of 2023.
- And the Indian startup ecosystem did not mint a single unicorn in the first three months of 2023
- And 84% of Indian VCs surveyed said that growth-stage startups faced difficulty in raising funds.
- But VC, CVCs and PE investors have announced 40 funds worth more than $3.6 billion so far this year to support Indian startups.
- European IPOs are at their lowest level since 2009.
- Investing in climate-tech is cooling down.
- But China is investing in record amount of metals and mining.
How to invest in startups right now:
Semi-conductors, baby.
Crypto & NFTs
Here’s what you need to know:
Crypto held steady in a choppy week.
Likewise sentiment. Looks like another steady week.
NFTs continued their slide and are only slightly up on 2023.
Bullish News
- Tether said its assets rose 5.7% to $86.5 billion in the second quarter of 2023, while it made more than $1 billion “operational profit”, a 30% increase on the previous quarter.
- Even though crypto is illegal in China, Binance manages to do $90 billion worth of transactions there anyway.
- The crypto arm of Japanese investment bank and brokerage Nomura won a crypto operating licence in Dubai.
- Terraform Labs and its founder, Do Kwon, will face fraud allegations.
Bearish News
- The SEC asked Coinbase to halt trading in everything except bitcoin.
- Several stable pools on Curve Finance using Vyper were exploited on July 30. The thieves stole $47 million.
- SBF may have been behind the BALD rug pull. Because of course.
- Robinhood’s crypto earnings were down 18% last quarter.
- Worldcoin may share your iris scans with government agencies.
- Nifty’s has shut down.
- A US judge has backtracked on the Ripple ruling, which has negative implications for alt coins.
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 Percent and Fundhomes
- 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.
