_{*as of market close August 14}

For the first time in more than three years, the Consumer Price Index (CPI), a measure of inflation, fell below 3% annually. The monthly increase was 0.2%, up from last month’s negative reading, but in line with expectations. The public markets had a muted, but favorable reaction, while crypto prices initially went up but later declined.

➨ TAKEAWAY: This was the data that Fed watchers had hoped for, and the long-awaited interest rate cut seems nearly guaranteed for September. The only questions are whether it will be a 0.25% or 0.5% cut - betting markets favor the former - and how many more cuts will come this year. Falling interest rates will be particularly beneficial for the real estate market, which has been waiting on lower mortgage rates, and higher-risk asset classes like collectibles and Pre-IPO venture, as risk-free returns decline.

Sports clubs have been among the best performing assets over the past few decades. In the past two decades every major US sports team has seen its value 2x or more. Today at 2 PM ET, join our sports business panel with Slava Rubin of Vincent, Andrew Durgee of Republic and Stuart Goldfarb of SKI Partners as they take a look at the pros and cons of getting involved in the asset class.

The median asking rent nationwide was $1,647 in July, and there were declines across all sizes of apartments for the first time in four years. Rents fell across the Sun Belt, where construction boomed during the pandemic, with rents in Austin (-16.9%) and Jacksonville (-14.3%) seeing the largest year-over-year declines. As a result, nearly a third of landlords are offering some sort of concession in their listings, up from 25% last year.

➨ TAKEAWAY: The root cause of the decline is the sheer number of apartments that have been built in the past two years, as supply finally caught up to demand. More multifamily units were completed in June than in any month in almost 50 years, and the U.S. is on pace to add more apartments in 2024 than ever before. Nationwide trends are interesting, but real estate is a local game, so investors should focus on supply and demand in individual markets before investing.

In the latest episode of Smart Humans, Slava Rubin talks with Frec CEO and founder Mo Al Adham about direct indexing and tax loss harvesting and why investors can benefit from those strategies.

🪙 Grayscale trusts: The crypto asset manager launched three new single-token trusts in August, which allow investors to get exposure to crypto tokens without having to own them directly. The three new ones, Bittensor (TAO), Sui (SUI) and Maker (MKR) have all seen gains thus far. However, in previous cases, those gains were short-lived and the majority of coins Grayscale has chosen have lost value.

🚀 The next unicorns: Forbes released its list of the 25 U.S. venture-backed companies they believe are the most likely to hit a billion-dollar valuation - their hit rate has been 58% in the past nine years - and this year’s list is unsurprisingly AI-heavy.

⚾ Fanatics Fest this weekend: The first ever fan festival from the massive sports merchandise and collectibles company kicks off this Friday at the Javits Center in Manhattan. Star athletes such as Tom Brady, Derek Jeter, Kevin Garnett and music stars such as Jay-Z, Travis Scott and Lil’ Wayne are all expected to appear.

🏡 Flipping scam: More than 25,000 victims of a scheme that involved the stars of HGTV’s “Flip or Flop” have been awarded $12 million, after they were convinced by false promises to pay hefty seminar fees. Always be wary of people who claim that flipping houses is an easy way to make money, because it takes a lot of time and skill to accomplish successfully.

🚀 VC “pay to play”: A record number of term sheets are now containing “pay to play” provisions, which are designed to benefit new investors rather than existing shareholders, as startups are looking to lure new capital in a tough funding environment.

AI has dominated the venture capital landscape recently and has been one bright spot in an overall funding downturn. But both VCs and everyday investors looking to get shares in emerging AI companies need to be mindful of the bottom line. Not only are revenue numbers significantly lower industry-wide than would be expected from the amount of VC investment, but now there are concerns around figures like annual recurring revenue (ARR) not actually being annual or recurring. Always do as much research as possible as to where the revenue is coming from before making an investment, but also understand that startups, especially AI startups that require large initial investments, may take years before they can be expected to generate strong revenue numbers.