Alternative Investing Report - August 26, 2024

_{*as of market close August 23, Bitcoin as of August 25}

The highly anticipated auction for Babe Ruth’s game-worn and photomatched jersey took place over the weekend, with the final sale price reaching $24.1 million, a new all-time record for any piece of sports memorabilia, nearly doubling the previous record of $12.6 million. The jersey comes from the famed “called-shot” game against the Cubs in the 1932 World Series, and last sold for $940,000 in 2005.

➨ TAKEAWAY: Though it fell short of Heritage’s $30 million estimate, it is still a monumental result and has set a new standard for what sports collectibles can achieve at auction. It is also testament to the power of photomatching, even if there is some controversy surrounding the match in this particular case. The connection to one of the most famous moments in baseball history is a large part of what led to the value increasing 25-fold since the last sale.

Sales of existing homes rose by 1.3% in July, the first gain since February, and beat expectations. However, sales are still down by 2.5% year-over-year, and prices continue to rise, with July seeing the 13th straight month of gains. Meanwhile, new home sales saw a substantial 10.6% monthly gain in July, and the median price of those homes decreased by 1.4% year-over-year.

➨ TAKEAWAY: Mortgage rates are expected to decline further at some point this year, which should create more buyer demand and more sales. Until those rates decline, though, buyers could continue to sit on the sidelines in anticipation of lower rates, keeping home sales relatively steady. Developers have more incentive to sell than existing homeowners, so expect new home prices to continue to lag behind existing home prices.

📊 Rate cuts are coming: At the Fed’s annual retreat in Jackson Hole, Wyoming, chairman Jerome Powell said, “[t]he time has come for policy to adjust,” making it clear that interest rate cuts are imminent, but he did not specify the size or timing.

🪙 Bitcoin price rises: In the wake of Powell’s speech, the crypto market rallied and Bitcoin touched $65,000, representing over a 10% weekly gain, as its price movement continues to be highly dependent on economic conditions.

🚀 Media VC funding: Global funding into media, entertainment and gaming reached $7.1 billion in the first half of 2024, a 58% increase over the second half of 2023, and M&A activity has doubled in the past year, both signs that the sector has rebounded after two down years.

🏡 Mortgage payments decline: The median monthly mortgage payment showed a year-over-year decline for the first time since 2020, as rates fell and price growth slowed.

💵 Private credit losing ground: Family offices are devoting fewer resources to private credit investments this year, as they pour more money into real estate and private equity, a trend likely to continue when interest rates are cut.

💻 Paul Allen auction: A collection of historic computers once belonging to the late Microsoft founder will be auctioned off at Christie’s later this week, including an original Apple-1 that could fetch upwards of half a million dollars.

🚀 Green investment in Africa: Climate tech deals represent nearly half of all venture investment on the continent so far this year, with renewable energy the most prevalent, and the most urgent in a place where many lack electricity.

🎨 Christie’s new Asia HQ: The auction house’s first major sale in Hong Kong will take place September 26 and feature a Claude Monet water lily painting worth an estimated $25 million - $35 million and a Zao Wou-ki painting worth $10 million - $15 million.

This week: SpaceX’s Polaris Dawn is scheduled to launch, carrying four civilian astronauts into the Van Allen radiation belts and feature the first ever non-governmental spacewalk. Originally scheduled for Monday, now scheduled for Tuesday but could be delayed further.

Tuesday: S&P Case-Shiller Home Price Index (June), FHFA House Price Index (June and Q2).

Wednesday: NVIDIA earnings.

Thursday: Q2 GDP data.

Friday: Christie’s Paul Allen/History of Computing Auction, consumer sentiment report.