Aug. 23 Markets Report: A Dumptruck Named Recession

Biden signs Inflation bill, Adam Neuman gets a second chance, and U.S. bankers are caught using WhatApp (an apparent nono).

Updated May 4, 2023

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Stocks

Real Estate

Crypto

NFTs

Wine

Startups

Sports Cards

Gold

Farmland

Whiskey

Macro

Source: MoneyMade 

Macro Scoops OTD

Source: theguardian.com

US economics

  • Interest Rates: 2.50%
  • Unemployment Rate: 3.5%
  • GDP YoY: -0.9%
  • CPI YoY: 8.5%

Biden's Big Bill

Stocks & Bonds

Bond yields

  • US3M: 2.7116%
  • US2Y: 3.3056%
  • US10Y: 2.998%
  • US30Y: 3.244%

Make Bonds Great Again

  • An analysis by Morgan Stanley Chief Cross-Asset Strategist Andrew Sheets found that holding cash is more attractive than stocks. Accelerated quantitative tightening—reduction in the Fed's balance sheet—will deteriorate the appeal of riskier assets in favor of treasury bonds.
  • Refinitiv reported that $4.1 billion in junk bonds were sold in the U.S. this past week, marking the highest issuance level since early June. S&P Global Rating expects 3.5% of junk bond issuers to default on their debt in the next 12 months, and ICE Data Services found that 6% of junk bonds—roughly worth $90 billion—are in distress (defined as yielding at least ten percentage points more than treasuries).
  • Prices for meme stocks fell across the board on Monday:
    • AMC dropped 38% after offering new APE preferred share class
    • BBBY dropped over 12% after it was reported that the company's suppliers stopped shipments due to outstanding bills. The dumping of shares by investor Ryan Cohen also contributed to the decline.
    • GameStop shares dipped 4.3% as revenue from their NFT marketplace took a plunge.
  • Ford promised to appeal a $1.7 billion class-action verdict that connects the automaker to a pickup truck crash that killed a couple in Georgia, USA. CEO Jim Farley said that Ford "continue[s] to be hampered by recalls and consumer-satisfaction actions" in an earnings call last month.

Sector performance

  • Energy: 3.03%
  • Consumer Staples: 0.88%
  • Telecom: -3.74%
  • Real Estate: -2.40%

 

S&P 500 winners & losers

  • Coterra Energy Inc: 6.28%
  • Occidental Petroleum Corp: 4.99%
  • Moderna Inc: -17.84%
  • Match Group Inc: -13.31

Real Estate 

The Housing Market is Hurting

Crypto

SBF Gets the Bag

NFTs & Metaverse

From Metaverse to Mainstream

Commodities

Gas Exports Hit the Breaks

Startups

Second Chances?

  • Adam Neumann, the co-founder of famously failed office-sharing unicorn WeWork, got Andreessen Horowitz (a16z) to invest $350 million into Flow, his new residential real estate startup, valuing it at over $1 billion.
    • The firm also gave Neuman $70 million to start a web3 carbon credit platform called Flowcarbon. The connection between Nueman's two companies remains unclear.
  • Fund-day Monday—Crunchbase reported some major funding this past week in energy and biotech.
    • Bill Gates's nuclear energy company TerraPower raised $750 million in a funding round led by the South Korean SK Group.
    • Cambridge, Massachusetts-based biotech Orna Therapeutics mustered $221 million in Series B to develop RNA therapies.
    • Senda Biosciences, another Cambridge biotech firm developing programmable medicines, got $123 million in a Series C round.