📰 This Week…

• Is a price correction coming for residential real estate in The South?

• Could Google give the entire startup and venture capital space a jolt of energy?

• Michael Jackson catalog sale moves closer to closing.

And much more!

📊 Markets

• Interest Rates, Federal Funds: 5.33%

  • Next FOMC meeting starts July 30

• 30 Year Mortgage Rates: 6.77%

  • (-1.7% WoW, -1.5% MoM, -0.2% YoY)

• Single Family Home Price Index: 423.3

  • (+0% MoM, +6.3% YoY)

  • June report, data is through April

• Commercial Real Estate Index: 123.6

  • (+0.7% MoM, -5.2% YoY)

💸 Economy

Bottom Line: Not much economic news. Better-than-expected manufacturing data. Mixed feedback from the latest Fed survey mostly supporting their current view of the economic conditions.

• US manufacturing is doing better than expected. Activity increased 0.4% in June. May’s number was also revised upward to a 1% increase in May. (Reuters)

• The latest Federal Reserve survey of businesses contained a mix of feedback. In general it pointed to slower short-term growth and a better balanced labor market. (Reuters)

🏠 Real Estate

Bottom Line: A CEO has a new prediction for The South. A big correction in prices as new construction pushes supply beyond the current levels of demand. June saw 25% of houses on the market with a price cut as inventory levels rise. Based on an analysis of data from 1890, most of the historical gains from real estate came from rental income - not appreciation.

• This June saw the highest portion of houses for sale with price cuts since 2018. About 25% of homes had at least one price cut. This is partially driven by increasing inventory levels. (Business Insider)

• The CEO of Reventure (a real estate data analysis company) thinks The South will see a price correction. He expects that prices could decrease as much as 20% over the next few years. The reason is that there is a surge of newly constructed homes set to come on the market. They’ll be hitting right at a time where buyer demand is declining due to unaffordability. (Business Insider)

• We may have the wrong return expectations for residential real estate. It’s only recently that we had easily accessible performance data. That means most analyses are missing a big part of the picture. A new study used newspapers to track home sales all the way back to 1890. From 1890 to 2006, 66% of total gains were from the rental income - not appreciation. When adjusted for inflation, there was basically no appreciation at all from 1890 to 1960. (MarketWatch)

• CNBC lists the top 10 states for buying and selling a home. It’s a nice collection of simple / easily accessible metrics. The state’s economic rank, appreciation, inventory levels, effective property tax rate, and median sales price. Florida, South Carolina, and Arizona are their top 3. (CNBC)

💡 Startups

Bottom Line: Despite the constant AI hype, some still don’t believe AI will be very revolutionary. Google’s potential acquisition of Wiz could jumpstart the startup landscape for both M&A and capital flows. The FTC is asking for additional information about some of Amazon’s latest AI dealings. AI continues to be a tailwind for chip startups. Two factors for identifying breakthrough companies and India’s first unicorn plans for IPO.

• Count Goldman Sachs’s Head of Equity Research among the AI bears. He believes that artificial intelligence is too expensive to operate and too inaccurate to live up to the hype. (Business Insider)

• If Google does end up acquiring Wiz for a giant sum, that could have ripple effects on the startup landscape. It may trigger an increase in acquisitions from other companies. It may also help bring more money into venture capital funds and thus more money to startups. (TechCrunch)

• Mike Maples Jr. is considered to be a top venture capitalist. He shared two key things in identifying breakthrough companies. First is the “inflection” point. This is when a new technology or another big change is first emerging. Examples include the launch of the iPhone and (potentially) the emergence of generative AI. The second is “insight.” The company has to correctly identify an impactful way to leverage this new change that everyone else hasn’t already thought of. So, probably not another AI tool to schedule meetings. (Fortune)

• Dutch startup Nearfield just landed $148M in funding. The company is developing tools to help make sure advanced computer chips are manufactured to specification. Nearfield believes their technology will be necessary to keep factory lines churning out a high yield of super-advanced AI chips. (Reuters)

• Amazon recently hired executives from AI startup Adept. They also licensed some of their technology. The FTC is (informally) asking questions. Regulators are reportedly trying to keep a close eye on big technology companies buying up AI companies. (Reuters)

• InMobi, India’s first unicorn startup is eyeing an IPO. They reportedly are planning to list in India in 2025. The company is planning to seek a $10B valuation. (TechCrunch)

🎵 Music Royalties

Bottom Line: Sony Music moves one step closer to closing its $600M purchase of half of Michael Jackson’s catalog.

• Sony Music’s deal to purchase half of Michael Jackson’s music rights got support from a California appeals court. The estate agreed to sell half the catalog for $600M earlier this year. But Jackson’s mother has challenged it, believing it goes against the late artist’s will. (Billboard)

🏆Best Alternative Investment Platforms

There are a lot of asset classes and a lot of places to invest. There are new platforms popping up and existing ones that are failing or consolidating.

That makes it difficult to figure out where to get started.

In our latest article, we pick ONE platform for each asset class. We tell you about them, why we like it, and give you some alternatives as well.

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