September 12, 2023

📰 News Organizations

• Instacart Kicks Off IPO, Aiming to Sell Stock at $26 to $28 a Share. The company is aiming to sell 22 million shares at $26 to $28 apiece, raising $572 million to $616 million, and plans to list shares and start trading on the Nasdaq next week under the ticker CART.
  

• Shopify-Backed Klaviyo Draws BlackRock to $518 Million IPO. The Boston-based company is offering 11.5 million shares for $25 to $27 each, while existing shareholders plan to sell 7.7 million shares, it said in a filing Monday with the US SEC.

• Disney, Charter End Dispute, Restoring ESPN, ABC to 15 Million Households. Under the terms of the agreement, Charter has agreed to higher rates for Disney’s channels in return for being able to provide the Disney+ and ESPN+ streaming services to its pay-TV subscribers.

• Telesat Buys SpaceX Launches for Lightspeed Internet Satellites. Elon Musk’s SpaceX signed a hefty deal with satellite operator Telesat, the companies announced Monday. Telesat will utilize SpaceX’s Falcon 9 rocket, with missions beginning in 2026.

• Airbnb Adds Google's AI Ambassador To Its Board Of Directors. Manyika’s addition underscores CEO Brian Chesky’s ambitions in artificial intelligence, which Chesky has said will radically change the Airbnb platform by next year.
  

• FDA Approves Updated Covid Vaccines from Pfizer and Moderna. The updated Covid vaccines from Pfizer and Moderna targeting the omicron variant XBB.1.5. were approved. Both vaccines need a recommendation from the CDCP before people can access them at pharmacies.

🐦 Twitter

• Policy is slowing other economies via rising debt service costs and a reduction in available financing, but the US has been more resilient. Other banks may need to cut first. This suggests that rate differentials will widen again in the dollar's favor. Source.
  

• Most recent max drawdown in households’ real estate asset values was worst since GFC but not comparable to drawdown back then. Excluding housing bust, recent drop was worst going back to at least 1950. Source.
  

• Signs pointing to a loosening US labor market: 2% YoY increase in jobs, smallest since March '21, 2.3% quits rate, lowest since Jan '21, and 4.3% YoY increase in wages, lowest growth since Jul '21. Source.
  

• Build times for single-family homes are basically back to normal at 183 days (~8-9 mos) from permit to close. A big improvement from '22, when builders reported an average cycle time of 216 days (~10-11 mos). Supply chain kinks (labor + materials) are mostly worked out now. Source.
  

• Both single-family rents and SFR expenses have grown 6.5% in the last year. When combined with rising interest rates, deals that make sense have fallen at least 50%. Source.
  

• Japan's 10y yield jumps to 0.71%, the highest since 2014 following hawkish comments from BoJ Governor Kazuo Ueda on negative interest rate policy. Ueda said it’s possible the Central Bank will have enough information and data by year-end to judge if wages will continue to rise. Source.

📓 Online Publications

• Apple Renews Qualcomm Deal in Sign Its Own Modem Chip Isn’t Ready. Apple Inc. is extending an agreement to get modem semiconductors from Qualcomm Inc. for three more years, a sign that its ambitious effort to design the chips in-house is taking longer than expected.
  

• Leading Index for Commercial Real Estate Decreased in August. The Dodge Momentum Index declined 6.5% in August to 178.0 from 190.3 in July. It’s likely that the full year of tightening lending standards and high interest rates has begun to affect institutional planning.

• Meta Is Charging Ahead With A More Advanced AI System. Meta is developing a new artificial intelligence (AI) system capable of going toe-to-toe with ChatGPT. Like LLaMA 2, Meta's new AI, which doesn't yet seem to have a name, will be open-source.

• New-Home Construction Is The One Bright Spot In The Market. In July, nearly a third of all homes for sale were new construction. Historically, new homes have made up only about 10% to 15% of the market. That still reflects how limited the amount of existing homes for sale is.

• Can We Get A Soft Landing Without Hurting The Labor Market Too Much? The unknown right now is if the number of people quitting their jobs and the number of job openings can all continue to fall without impacting the unemployment rate too much and pushing us into a recession.

🎧 Podcasts

• PwC Is Giving Up On Tens Of Millions Of Dollars In Consulting Work. The Big Four firm is telling US clients that they’ll stop offering some advisory services. It’s part of PwC’s wider revamp of its audit work, and it’s meant to reduce the risk of conflicts of interest. Source(4:36)

• Venezuelan Bonds Are Rallying. Investors are betting that the government is getting close to a diplomatic breakthrough with the US. Washington and Caracas have been holding secretive talks for a while now, and an agreement could lead to softer US sanctions. Source(5:35)

• Australia’s Biggest Pension Fund Is Going Digital. The pension fund is called AustralianSuper and it’s investing €1.5bn into Vantage data centers, one of the largest data center businesses in Europe. AustralianSuper’s investment reflects a pivot away from the struggling traditional property sector. Source(9:04)
  

• DOJ is Suing Google. Alphabet faces US government scrutiny for its 90% control of the search engine market. The Department of Justice is particularly concerned about Google being set as the default search engine on devices made by companies like Apple. Source(1:58)
  

• IRS Deploys AI to Target Wealthy and Corporations for Unpaid Taxes. The IRS received $80 billion from the Inflation Reduction Act and is now targeting wealthy individuals and large business partnerships using both revenue officers and AI to recover owed taxes. Source(14:50)