Alternative Investing Report - February 13, 2025

*as of 2/12; Sources: S&P, BTC, FTSE, DJRE, CL50

The Consumer Price Index (CPI), a measure of inflation, rose 0.5% in January, well above expectations, and is now back up to 3% on a yearly basis, the highest rate since last June. Core CPI, which excludes food and energy costs, was up 0.4% monthly and 3.3% annually. Public market reaction was muted, with stocks down slightly, though stock futures fell and bond yields jumped.

➨ TAKEAWAY: Rising inflation makes further Fed interest rate cuts even more unlikely, and comes a day after Fed chair Jerome Powell had already indicated he is in no rush to cut. Traders now predict the next rate cut won’t come until September or December, and after previously high hopes for as many as four rate cuts this year, they now see a 70% probability that the Fed will cut only once. Investors need to adapt to the fact that “higher for longer” is now the reality, and a low interest rate environment is not coming anytime soon.

The hottest housing market in the U.S. is now Manchester, NH based on median list price, average days a house spends on the market, and average number of views per listing. Manchester’s median list price was up 4% in January, the average days on market was 46 compared to the U.S. average of 73, and listings received four times as many views as the national average. Following it on the list were Hartford, CT, Kenosha, WI, Norwich, CT, and Worcester, MA. In the hottest markets, housing prices rose by 1.5% year-over-year compared to a 2.2% decline nationally.

➨ TAKEAWAY: Since mid-2022, the only cities to make the hottest markets list have been in the Northeast and Midwest, leaving the South and West out entirely. Manchester and Worcester are reasonably close to Boston, Kenosha is between Chicago and Milwaukee, while Hartford and Norwich are between Boston and New York. Mid-sized cities such as these have seen sustained demand because of their relative affordability and proximity to larger metro areas.

In this episode of Smart Humans, Vincent founder Slava Rubin and Sacra co-founder Jan-Erik Asplund had a wide-ranging discussion about Elon Musk’s SpaceX, the most valuable private company in the world. They talked about the company’s growth, strengths, challenges and IPO prospects, and answered investor questions.

💵 Private equity “mega-exits”: Volume from deals valued at more than $1 billion rose by 17% in 2024, and the beginning of 2025 has continued that trend, with Blackstone’s $3.1 billion sale of Anthos Therapeutics to Novartis and KKR’s $2.7 billion sale of Kito Crosby to Columbus McKinnon the latest “mega-exits.”

🚀 European defense tech funding: As the war in Ukraine continued and geopolitical turmoil rose, defense tech companies in Europe raised a record $5.2 billion in VC funding in 2024, a 24% yearly increase and nearly 5x the number from 2019.

🪙 Cardano ETF: NYSE Arca filed for a Cardano (ADA) spot ETF on behalf of crypto company Grayscale, the first step in creating a fund that could open up easier access to the 9th-largest cryptocurrency.

📜 Rally to offer Constitution: The fractional collectibles platform announced an upcoming offering of a 1787 original printing of the U.S. Constitution at a market cap of $995,000, similar to a $1.02 million sale of a different copy at Sotheby’s last June.

🏢 Brookfield bullish on CRE: Brookfield Asset Management, one of the largest property owners in the world, sees the commercial real estate market on the upswing, as cash flows and sentiment improves, and expects strong investment opportunities in 2025.

🚀 WeFunder’s successful 2024: The equity crowdfunding leader doubled its revenue last year and posted a $2.2 million profit, a significant recovery from the post-pandemic downturn, hinting at increased investor interest in early stage investing.

Christie’s Augmented Intelligence auction, the first sale of exclusively AI-created artworks at a major auction house, opens on February 20 and has already stirred up controversy. An open letter from artists to Christie’s urging its cancellation has received more than 5,500 signatures. The artists express “serious concern” about the support of AI models that were trained on human artists’ work “without permission or payment.” Christie’s responded by saying the most of the artists in the auction used AI to enhance their work and the AI models were trained on the artists’ own work. Expect AI-create artwork to continue to engender controversy, and for this particular flareup to drive more attention to the auction and possibly boost its results.