The stock market just wrapped up its worst year since the Great Financial Crisis. Now, more and more investors are looking for potential solutions outside of traditional markets.

One thing the investing pros are turning to are real assets like fine art. Not just for inflation protection and portfolio diversification, but performance too. According to new research from Goldman Sachs, diversified portfolios with real assets have actually outperformed the traditional portfolio of 60% stocks and 40% bonds since WWII.

Real assets like… physical art. Now, one innovative investment platform actually makes it easy to invest in the $1.7 trillion art market. It's called Masterworks.

With Masterworks, over 627,000 members have first-of-its-kind access to investments in multi-million dollar art (think Picasso, Basquiat, and Banksy) for just a fraction of the price. With their 3 most recent art sales, Masterworks delivered 10.4%, 35%, and 13.9% net returns to investors.

Offerings have sold out in just minutes, but Daily Peel readers are invited to skip the waitlist with this exclusive link.

• At this point, Congress should just combine with the WWE. I mean, this debt-ceiling showdown is a better cage match than I’ve ever seen
• It’s a Big week for Big earnings in Big tech. I don’t want to get too meta, but this week could snap a streak in tech names that’s been better than eating an apple a day
• Unlike most, this Bird hasn’t succumbed to avian flu just yet as it makes its first interest payment since a little-known billionaire bought them out
• You gotta love democratic capitalism. Notorious sandwich chef and scam artist Billy McFarland is back, and he’s only charging $1,800/hr

PCE Says PeaCE to Inflation

Fingers crossed, I don’t deeply regret that section title a few months (or weeks) from now…

But hey, we’ll run with it. JPow and the gang begin their first of 8 FOMC meetings of 2023 later today, and you better believe this is THE most important one ever (until the next one, of course).

To celebrate the first macro Holiday of 2023, let’s check in on inflation. To close out last week, the Bureau of Economic Analysis blessed us with the Fed’s preferred measure of inflation, known as the Core Personal Consumption Expenditure (PCE) Price Index, or Core PCE deflator if you want to sound cool and smart.

To sum it up / dumb it down (whichever you prefer), it’s basically CPI stripped of the volatility of energy and food commodity prices. Yes, those are arguably the two most important expenses to Americans, but they also just so happen to be among the most volatile. After all, we’re not here to make sense; we’re here to make cents.

Core PCE came in smack-dab in line with economists’ expectations, posting price accelerations of 4.4% annually for the month of December. That’s the lowest level since wayyyy back in October 2021 and a 0.3% fall from November’s 4.7%. December’s numbers also mark 3-months in a row of decline. That’s officially a streak, baby!!

Unlike your career, we appear to be moving in the right direction. Following the reports, CME’s goated Fed Watch tool, which tracks market-implied probabilities for the size of the next rate hike, spiked to nearly 100% odds of a measly little 25 bps hike. This is almost definitely what was already priced in any way, but it’s nice to see the confirmation.

But as always, Mr. Market still has something to be afraid of. Just as we get inflation to maybe, hopefully, start to subside, investors became trepidatious over the now suddenly increased likelihood of a 2023 recession. Seemingly on a daily basis, depending on the data released from D.C., the market flip-flops between soft landing and outright recession as the year’s baseline expectation. Isn’t investing fun?

As your net worth hangs in the balance, the world will be hanging on every last syllable and its associated tone coming from the old, gray mouth of Jerome Powell. Driving this heightened fear is something we’ve touched on before: monetary policy lags.

The Fed’s tools to regulate the economy are okay, but they’re not the best. It’s like hanging drywall with nails rather than screws…it kinda works, but we can do better.

Raising rates is no different. The cost of money becomes elevated, drying up liquidity, which acts almost like a Butterfly effect and takes its sweet time to spread throughout the economy.

Repo rates feel the effects immediately, but a home remodeler in South Dakota feels the effects much slower as his customers slowly become more and more apprehensive about renovations as their borrowing rates rise.

The elasticity of the cost of money causes a chain reaction that slows growth like an airplane after landing rather than you slamming on the brakes inches in front of a red light.

This is the real trickle-down economics, and it’s scaring Mr. Market. The worst part is we can’t know if we’ve gone too far until we do. But 2022 saw the fastest rise in rates in US history, so maybe Mr. Market is right to be a bit skittish.

Carvana ($CVNA) ↑ 28.70% ↑

• Only slightly less infuriating than Bed, Bath, and Bankrupt, this dumpster fire of a stock has been absolutely ripping lately. But this one might actually make sense.
• And it’s not because of anything the company itself did, but the used car market is heading onto an on-ramp, it seems. Supply for used cars has started to drop precipitously recently as cost-cutting Americans begin to focus more on saving on used vehicles than paying $20k more for a new one just to have Apple CarPlay.
• Supply down, price up = good for used-car dealer Carvana’s margins. Tip of the cap to ‘em because, well, let’s just say there’s a Carvana building right across from my apartment, and despite dropping almost 99% from the peak, the lights never went out.

SoFi Technologies ($SOFI) ↑ 12.46% ↑

• Shareholders couldn’t have gotten a better Q4 earnings report from SoFi even if the company committed fraud (maybe they did, idk). It’s a dream come true for the darling of FinTech.
• Yeah, it was that good. Not only were revenues up 60% YoY in Q4, but deposits on checking & savings accounts surged 46% on the year, with a whopping 88% of those being linked to direct deposit plans.
• Net losses fell 34% for the year and 64% for the quarter, too. But as you all know, in this economy, it’s all about what the company says about the future. While some banks zig, SoFi plans to zag itself to profitability in 2023, according to CEO Anthony Noto.
• Now, just imagine where they could be if they did spen—excuse me, *waste $625mn on the naming rates to a stadium home to two of the middest teams in football