Market Updates

The 30-year fixed mortgage rate dropped below 7% for the first time since August. It is the seventh straight week that rates have dropped, and with the Fed signaling that three rate cuts are coming in 2024, it is likely that they will continue to drop. They also see four cuts in 2025 and three in 2026, though anything that far out should be taken with a grain of salt. In any case, a lower interest rate environment will be a boon to a stagnant real estate market and other alternative assets that flourished before the recent rate hikes.

A set of six match-worn Lionel Messi jerseys sold for $7.8 million. They were from last year’s World Cup, when Messi led Argentina to a championship. It was the highest sale at auction for any sports memorabilia this year and sets a record for any Messi memorabilia. There were some hopes that it could break the all-time record for any jersey, but it fell short of the $10.1 million record set by an NBA-finals Michael Jordan jersey last year. Still, it speaks to the demand for one-of-a-kind items linked to iconic performers and iconic moments.

After a three year battle, pre-IPO company Epic Games won its antitrust lawsuit against Google. The maker of the popular game Fortnite alleged that Google’s app store practices violate state and federal law, and a California jury agreed. Both Google and Apple take a cut of revenues generated by apps in part by forcing users to use their payment systems, which harms third-party developers. This isn’t the end of the fight, though, as Google is planning to appeal and Epic’s similar lawsuit against Apple is still ongoing. Still, the victory is a major milestone for Epic Games, which is one of the most valuable private companies in the world.

As competition increases, private credit lenders are seeing lower yields. As private credit has taken off in the past couple of years, it is no surprise that the landscape has gotten more crowded. With originators fighting over high-quality opportunities, borrowers can take advantage and negotiate better rates, lower origination fees and higher leverage ratios. Private credit also could be negatively affected by a lower interest rate environment, as borrowers could have other, better options if capital markets loosen.