☕️ The Great Unwinding

What's the deal with tungsten cubes?
November 04, 2021 View Online | Sign Up

Morning Brew

SimpliSafe

Good morning and Happy Diwali to everyone celebrating. We asked our coworkers if they had any holiday recipes for y'all, and they came through in the clutch.

If you make any of these, take pics and let us know how it turned out.

Neal Freyman, Matty Merritt, Jamie Wilde

MARKETS

Nasdaq

15,811.58

S&P

4,660.57

Dow

36,157.58

10-Year

1.606%

Bitcoin

$62,854.02

Zillow

$65.47

*Stock data as of market close, cryptocurrency data as of 5:00pm ET. Here's what these numbers mean.

  • Markets: While all the major indexes hit records, the S&P gets a special mention because it closed at an all-time high for the 62nd time this year; it just needs 16 more to break the record set in 1995. Meanwhile, Zillow (more like Zil-low, amirite?) plunged a day after the company said it was ditching its much-hyped house flipping business.
  • Government: Democrats added four weeks of paid family and medical leave back to their $1.85 trillion domestic spending bill that the House could vote on as soon as today.

Markets Sponsored by Fidelity Investments
We talk through the pros and cons of options as an investment tool in today's episode of Fresh Invest, our podcast with Fidelity. Listen now.

ECONOMY

The Great Unwinding Has Arrived

Lord of the Rings character saying "And so it begins"

Giphy

In a landmark moment for the US' recovery from the Covid-19 economic crisis, the Federal Reserve said that it would begin reducing its asset purchases by $15 billion/month beginning later in November.

When that program fully runs out next summer, investors expect the Fed to begin hiking interest rates, which are currently near zero. No rate hikes were announced yesterday.

How we got here

In spring 2020, the Fed unleashed the stimmy to end all stimmies: a $120 billion/month bond-buying program designed to keep borrowing costs low and help consumers and businesses weather the economic storm. This program, and other relief measures introduced by the government, are credited with keeping the economy afloat and spurring a faster-than-expected economic recovery.

But as the economy regained its footing, another menace has emerged: inflation. A medley of factors, including supply chain bottlenecks and roaring consumer demand for goods, has driven prices higher than the Fed, or really anyone going shopping, would like.

  • In September, consumer prices grew by 4.4% annually, compared to the Fed's 2% target.
  • US gas prices averaged $3.40/gallon as of last Saturday, up from $2.14 a year ago.

Concerned that higher inflation could become its own drag on the economy, central bankers decided it's time to wind down the stimulus and hope that prices come back down to Earth.

Zoom out: The Great Unwinding isn't a US solo album. Central bankers from Australia to Canada have already begun to roll back their pandemic-era stimulus measures as the global economy heals and inflation becomes a threat. Today, the Bank of England could become the first major central bank to raise interest rates following the recession.—NF

        

ENVIRONMENT

Finance Comes to the Planet's Rescue, Maybe

Can you save the Earth and make a whole lot of dough while doing it? We're about to find out.

More than 450 major financial firms have signed on to the Glasgow Financial Alliance for Net Zero, which abbreviates to the much jollier GFANZ.

The aim is to funnel the alliance's collective $130 trillion in assets (representing 40% of the world's capital) into projects that help the globe reach the target set out by the Paris agreement of limiting warming to 1.5 degrees Celsius.

  • GFANZ is led by former central banker and current UN Climate Envoy Mark Carney, and it will be co-chaired by Mike Bloomberg.

Why it will work: Because loads of private capital will have to be deployed to help fund the next, say, Tesla. "The gap between what governments have and what the world needs is large," Treasury Secretary Janet Yellen said.

Why it won't work: Environmental nonprofits have hit GFANZ members for being climate hypocrites, saying that donning a cape doesn't make you a superhero. For instance, global banks have poured $4 trillion into gas, oil, and coal projects since the 2015 Paris agreement, according to Bloomberg.—NF

        

STARTUPS

VCs to Women: Whoa, Forgot About You

US venture capital raised by female-founded companies slowly rising from 2010. 2021 amount over $40 billion, 2020 just over $20 billion

Francis Scialabba

US-based startups with one or more female founders raised $40 billion in the first three quarters of 2021, almost double the amount raised in all of 2020 or 2019, according to a new report from PitchBook.

  • It's also been a record year for women to sell their companies or take them public. Through September, female-founded companies recorded $59 billion in exits.
  • Plus, the greatest number of women-led startups hit unicorn status in 2021.

This is a hard pivot from last year. Despite the record amount invested by VCs in 2020, female-founded startups saw drops in the number of deals (down 2%) and investment dollars (3%) that closed.

So, what changed? Did VC funds wake up on January 1 and remember women can run businesses? Prolly not. One indicator might be who's writing the checks: As of September, roughly 15.4% of general partners at VC firms were women, up from 12% in 2019.

Zoom out: Before you start blasting "Fight Song," female-founded startups only nabbed about 18% of the $239 billion VC firms shelled out through September.—MM

        

TOGETHER WITH SIMPLISAFE

Welcome to the Naughty List, Package Thieves

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Right now you can get SimpliSafe for 50% off or more, including a risk-free, 60-day trial. Protect your home for the holidays today.

GRAB BAG

Key Performance Indicators

Wayward balloon soaring over Los Angeles

KTLA

Quote: "One working theory is that pilots might have seen balloons."

An FAA spokesperson thinks authorities may have finally figured out what's behind the curious sightings of a "jetpack guy" flying high above Los Angeles over the last year. Authorities are guessing it could be a large inflatable balloon, one that resembles The Nightmare Before Christmas character Jack Skellington.

Stat: Baleen whales, which include humpback, blue, and minke whales, eat more than The Rock could ever dream of, according to a new study in Nature. Their diet of 10–20 tons of food a day is equivalent to about 70,000–80,000 Big Macs.

Read: Why everyone is wrong about the metaverse. (Shaan Puri)

        

CRYPTO

You're So Dense

A tungsten cube

Justin Paterno

Crypto investors mean that as a compliment of the highest order. Their growing obsession with cubes of tungsten, a material admired for its tightly packed particle structure, hit a new high this week.

What happened: A group of investors called the TungstenDAO purchased an NFT of a 2-ton (but just over 14 dainty inches) tungsten cube for 56.9 ether, or about $250,000. The NFT comes with the right to visit the cube once a year in its private storage room at the Illinois headquarters of its manufacturer, Midwest Tungsten Service.

From metal → meme

Midwest Tungsten Service makes tungsten for industrial uses, but started selling small cubes of the metal in 2015 as desktop knickknacks. That soon evolved into a meme when ridiculous Amazon reviews piled up exalting the "intensity of its density."

Then, this year, influential crypto investors like Coin Center's Director of Communications Neeraj K. Agrawal went full magpie on the metal. A few tweets later and Midwest Tungsten Service's Amazon store sold out.

Bottom line: This is silly, but we're not going to underestimate how much value a meme can generate after GameStop, shiba inu coin, etc.—JW

        

WHAT ELSE IS BREWING

  • The Supreme Court heard arguments in the first major case involving guns in more than a decade. This one centers around a New York law that restricts people from carrying guns outside the home.
  • China plans to quadruple its nuclear stockpile to at least 1,000 warheads by the end of the decade, the Pentagon reported. That's far above what was previously estimated.
  • Allbirds shares jumped 90% in their debut on the Nasdaq.
  • Packers QB Aaron Rodgers tested positive for Covid-19. The NFL has reportedly considered Rodgers unvaccinated since the beginning of the season, even though Rodgers said he was "immunized" back in August.

BREW'S BETS

A delicious opportunity ends soon. Flippy, the AI-powered kitchen assistant robot, is really cookin' now. With Inspire Brands—parent company of Buffalo Wild Wings—Flippy Wings is forecasted to increase food production speed by 10–20%. Don't miss all the *chef's kiss* potential: this investment opportunity ends November 18.*

Welcome to the party. This NASDAQ-listed cannabis cultivator just took a major step to penetrate the US and Canadian cannabis markets by acquiring a rapidly expanding, industry-leading company with strong revenue growth. Learn how they are positioned to grow.*

Space sure is crowded: Check out this visualization of all the debris, satellites, and other objects floating in low-Earth orbit.

So that's where the Vikings pillaged: Work your way through history with these 35 maps.

Let's chat about sustainability: At the next Marketing Brew event, we'll talk with a senior manager at Delta Air Lines about how brands can best communicate their environmental initiatives to consumers. Register here.

*This is sponsored advertising content

GAMES

The Puzzle Section

Brew Mini: Today's Mini is called "Counting Sheep," but it certainly won't put you to sleep. Play it here.

Three headlines and a lie

Three of these news headlines are real and one is faker than a fitness influencer's apology. Can you guess the odd one out?

  1. Airbnb hints at purchasing Alcatraz prison block for rentals
  2. New trend sees Chinese influencers head to Shanghai Costco to pretend they're in the US
  3. Alvin and the Chipmunks owner is looking to sell for about $300 million
  4. On P-rnhub, math teacher makes his mark teaching calculus

FROM THE CREW

Papaya: Crypto or Cannabis Strain?

Papaya: Crypto or Cannabis Strain?

On the streets of NYC, we tested people's knowledge of crypto and marijuana strains. With new altcoins released every day, it's hard to prove you are a serious investor (or weed connoisseur). Watch now and see if you're smarter than the average New Yorker.

ANSWER

We made up the Airbnb one.

PS: Don't forget to share the Brew to win free swag.

✢ A Note From Fidelity

Investing involves risk, including risk of loss.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

         

Written by Neal Freyman, Matty Merritt, and Jamie Wilde

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