November 3rd - This Week in Alternative Investments
$34,902 (+$788 since 10/26)
Liv-Ex Fine Wine 1000
(Monthly - October)
424 (-6 from Sept.)
Thomson-Reuters Venture Capital Index
(Daily - 11/2)
12,447.51 (+466.64 since 10/26)
S&P/Case-Shiller U.S. National Home Price Index
(Monthly - August ‘23)
311.50 (+1.34 from July)
Bite sized market updates
Sam Bankman-Fried was convicted on all seven counts of conspiracy and fraud. The FTX founder and former CEO now faces 115 years in federal prison.
U.S. housing prices hit another all-time high. The Case-Shiller National Home Price Index rose 0.9% in August, while the FHFA House Price Index was up 0.6%.
The Federal Reserve kept rates unchanged. The move was widely expected, but still, mortgage rates fell afterwards and the market rallied.
Google is investing $2 billion into AI startup Anthropic. This comes as the Biden administration issued a wide-reaching executive order aimed at AI companies.
Plus: A $50 million blue diamond, an unseen $65 million Monet painting and a $1.8 billion real estate commission jury verdict.
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Smart Humans Podcast
Smart Humans explores the world of alternative investments. From Venture to Collectibles, Real Estate to Art and beyond - we discuss a new world of investment opportunities and the catalysts that impact their demand.
In this episode Slava Rubin talks with Alumni Ventures' Mike Collins about venture investing and scaling across universities.
Sam Bankman-Fried was convicted on all seven counts of conspiracy and fraud. (Reuters)
A New York jury convicted former FTX CEO Sam Bankman-Fried on all counts. He was accused of seven counts of fraud and conspiracy related to the downfall of the crypto exchange. Rather than take a plea deal, he chose to stand trial and now faces up to 115 years in prison. He will be sentenced in March 2024 and may go on trial a second time on separate charges next year. The guilty verdict allows the crypto market and industry to move past the $10 billion fraud and likely will not affect short-term pricing.
Even as mortgage rates remain high, home prices are still gaining. The S&P CoreLogic Case-Shiller National Home Price Index saw a monthly gain of 0.9% - it's the seventh month in a row of gains and the index is at an all-time high. Additionally, the Federal Housing Finance Agency (FHFA) House Price Index went up 0.6% in August and has seen a 5.6% year-over-year gain. With prices and mortgage rates still high, housing affordability has hit an all-time low (since 1989, when it was first tracked). As long as demand continues to exceed a record-low supply, expect prices to keep rising.
For the second straight meeting, the Federal Reserve held benchmark interest rates steady. They kept the federal funds rate in a target range between 5.25%-5.5%, leading to a stock market rally and mortgage rates seeing a nearly half-point decline. With the economy holding strong and unemployment down, and inflation still above Fed Chair Jerome Powell’s 2% target, it is not likely there will be any rate cuts anytime soon. In the current rate environment, lower-risk yield products such as private credit have become more attractive, while more speculative asset classes need to deliver higher returns to be worth the risk.
Anthropic secured another multi-billion dollar investment from a tech giant. The AI startup will received $2 billion in funding from Google, with an initial investment of $500 million and a commitment of $1.5 billion in funding in the future. This comes only about a month after Amazon announced a $4 billion investment into Anthropic, which committed $1.25 billion upfront. Google already took a 10% stake of the business in April, which was valued at $4.1 billion in May, and now is said to be valued between $20 billion and $30 billion. The news came as the Biden administration released an executive order targeting AI startups and attempting to address safety and national security concerns. Expect further regulation as AI continues its rapid advance into the national consciousness.
Research and Insights from the Vincent team
More stories worth checking out
A Missouri jury awarded $1.8 billion in damages to home sellers after finding realtors artificially inflated commissions - a verdict that could radically transform the market.
A previously unseen Claude Monet painting could sell for over $65 million next week at Christie’s.
The 17.6 carat “Bleu Royal” vivid blue diamond is up for sale this week and is expected to sell for over $50 million.
VC giant Andreessen Horowitz is aiming to raise $3.4 billion for its next fund in the first half of 2024.
Private credit defaults decreased in Q3, dropping to 1.41% from 1.64% in Q2.
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