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Happy Friday. The housing market is stalling, another inflation report came in hot, Anthropic’s revenue numbers came out, and retail vacancy fell. Let’s dive in!
📺 Watch: Our Pre-IPO investor briefing on the current state and future of fintech featuring companies like Stripe, Revolut, and Ramp.
This issue is brought to you by Kalshi - hedge your risks.
📈 DAILY MARKETS
🏡 MARKET UPDATE
Housing market fundamentals are all pointing downwards, with inventory rising, demand cratering, and price growth slowing. Redfin reported that the median U.S. home asking price fell year-over-year for the first time since March, and that homebuying demand is near record-low levels. Pending sales have fallen 12.7% annually and are also at near-record lows, falling in every single metro area in the country. Meanwhile, Realtor.com also recorded an annual decline in median listing prices, and a 6.8% year-over-year gain in active inventory.
➨ TAKEAWAY: The effects of the recent Fed rate hike are already beginning to show, as mortgage rates spiked by around 75 basis points in September, leading to predictably negative results for the housing market. While it is definitely a buyer’s market in most of the country, rising mortgage costs are hampering demand, and sellers have not cut prices enough to balance it out. With interest rates likely to continue going up, something will have to give for the housing market to come back to life.
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📺 EVENT REPLAY
Slava Rubin and Jan-Erik Asplund discuss the current state of the Pre-IPO fintech market, starting with the evolution of fintech from 2008 to the present and then highlighting key companies like Stripe, Ramp, Revolut, and Plaid. They look at market trends, valuation dynamics, and the impact of AI on the future of financial technology.
📰 NOTABLE NEWS
📊 PPI report: The Producer Price Index (PPI) soared by a whopping 1.3% in September, the largest monthly gain since March 2022 and well above expectations. On an annual basis it was up 6.3%, the highest level since December 2022, and well above the Fed’s target level. Though energy costs were a major culprit, the core PPI that excludes food and energy costs still rose by 0.7% monthly and 5% annually.
🤖 Anthropic revenue: Ahead of an anticipated public offering rumored to be scheduled for November, Anthropic reportedly told investors its third-quarter revenue hit $16.8 billion, a 45% gain over Q2. While the underlying numbers looked strong, the rate of growth fell to a point where there are now questions about whether the reported $2 trillion valuation can be justified.
🏢 Retail vacancy falls: U.S. retail vacancy edged down in Q3 to 4.3%, as net absorption hit 10.5 million square feet, the highest quarterly gain since 2023. Net absorption was positive across general retail, shopping centers and malls, and slowing construction rates should keep that trend going in the near future.
💵 Moody’s warns on private credit: The ratings agency issued a warning that the prevalence of payment-in-kind (PIK) arrangements is hiding underlying issues across the private credit sector.
💻 Record Apple-I auction: A rare, working Apple-I computer from 1976 signed by Apple co-founder Steve Wozniak sold for a record-breaking $1.15 million, well above pre-sale estimates of between $500,000 and $800,000. It also came with a signed letter from Steve Jobs offering the original owner a trade-in for an Apple II.
🎨 Frieze London sales: While all results from art fairs are anecdotal and have to be taken with a grain of salt, both Frieze London and Frieze Masters seemed to mark a successful beginning to London’s Art Week, with several multi-million dollar sales and a number of younger collectors making purchases.
📝 IN CASE YOU MISSED IT
Monday: ❌ Firmus IPO cancelled, 🚀 Quantum funding updates
Tuesday: 🏀 Record Jordan jersey, 🏡 Hottest housing markets
Wednesday: 💵 Private Equity update, 🏢 Office market stabilizes
Thursday: 📊 Hot CPI report, 📉 Character.AI bankruptcy
Have a great weekend!
