Alternative Investing Report - September 12, 2024

_{*as of 9/11}

The Consumer Price Index (CPI) increased by 0.2% in August, and by just 2.5% year-over-year, which beat expectations and is the smallest yearly increase since February 2021. Core CPI, which excludes food and energy costs, was up 0.3% in August, slightly above expectations, and 3.2% year-over-year. These numbers are a clear improvement over the peak yearly CPI reading of 9.1% in mid-2022.

➨ TAKEAWAY: Inflation numbers are heading in the right direction, and towards the 2% goal the Fed has been eyeing for some time. All signals point towards a rate cut when they meet next week, though the Core CPI number may point to a 0.25% cut rather than a 0.5% cut. Markets initially reacted negatively to the report, but rallied by the end of the day, as almost every asset class has started to price in the anticipated cut.

A five-ton Cray-1 Supercomputer from 1975 belonging to Microsoft co-founder Paul Allen sold on Tuesday for $1.02 million, setting a new record for a computer sold at auction. It is the first time a Cray-1 has ever been sold publicly, and the total smashed the pre-sale estimate of $150,000-$250,000. It is one of only 80 ever built, and one of an estimated seventeen to still exist.

➨ TAKEAWAY: Three of the principal factors that drive a collectible’s value are rarity, desirability and provenance. The Cray-1 went well above estimates because it is the first one ever to be offered at auction, and because it belonged to a legendary tech mogul. The record may not last very long, as an Apple-1 computer from 1976, also belonging to Allen, is closing later today with a pre-sale estimate of $300,000-$500,000, higher than the Cray-1’s was.

🚀 Climate fundraising: VC climate funds have raised over $7 billion in total this year, compared to $5.2 billion raised in all of 2023, as interest in technology tackling climate change continues to grow.

🚜 Regenerative agriculture: Microsoft’s Climate Innovation Fund invested in Farmland LP’s latest fund focused on organic regenerative farmland, where sustainable practices restore and improve the health of the soil and ecosystem.

🏡 Hottest housing market: Manchester, NH, once again saw the most views per property on Realtor.com, more than 3.3 times the national average, as the Northeast and Midwest dominated the rankings. While home prices have dropped nationally by 1.3% year-over-year, the top 20 markets have seen their prices rise by 3.3%.

👑 Fashion auction: Later this month at Julien’s, clothes and accessories from celebrities will be auctioned, including a crown worn by Bad Bunny and a necklace worn by Lady Gaga.

🪙 Crypto and the debate: Despite crypto’s growing prominence in politics, and the amount of money pro-crypto groups have donated this election cycle, neither candidate mentioned it in Tuesday’s debate, which shows that its mainstream relevance is still limited.

🏢 Lone Star funds: The private equity firm raised $2.7 billion for its latest global commercial real estate fund, as more firms look to buy distressed assets at what may be the bottom of the market.

Apple announced its newest phone, the iPhone 16, with Apple Intelligence, its AI platform, taking center stage. The iPhone 16 was designed “from the ground up” to incorporate the new AI features, which include ChatGPT integration and a number of photo and image related tools. With the biggest phone from the biggest company in the world incorporating AI, it’s only a matter of time before it becomes even more mainstream.