All Eyes on the Economy

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November 04, 2024

The Flag

Good morning and Happy Monday! Here are the Flag’s Top Five stories that should be on your radar to start the day:

  • US: Trump talks about reporters being shot and says he shouldn’t have left White House after 2020 loss (AP)

  • World: Israeli airstrikes kill at least 31 people in Gaza, medics say (Reuters)

  • Business: A new copyright rule lets McDonald's fix its own broken ice cream machines (NPR)

  • Technology: ChatGPT releases a search engine, an opening salvo in a brewing war with Google for dominance of the AI-powered internet (Fortune)

  • Sports: Jerry Jones: Cowboys to mull upgrades; won't give up on season (ESPN)

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📏 One fateful sea voyage, a kilogram of mystery, and America’s brush with the metric system—it almost changed everything. But the stormy seas had other plans. Dive into the intrigue by becoming a premium subscriber!

POWERED BY MASTERWORKS

How has the art investing platform Masterworks been able to realize an individual profit for investors with each of its 23 exits to date?

Here’s an example: an exited Banksy was offered to investors at $1.039 million and internally appraised at the same value after acquisition. As Banksy’s market took off, Masterworks received an offer of $1.5 million from a private collector, resulting in 32% net annualized return for investors in the offering.

Every artwork performs differently — but with 3 illustrative sales (that were held for 1+ year), Masterworks investors realized net annualized returns of 17.6%, 17.8%, and 21.5%.

Masterworks takes care of the heavy lifting: from buying the paintings, to storing them, to selling them for you (no art experience required).

Right: Sorting Through Biden's Garbage Hugo Gurdon, Washington Examiner

Right: Make Politics Great Again Julie Ponzi, The American Mind

Left: Lessons for Democrats To Win the Working Class Jared Abbott, The Nation

2024

All Eyes on the Economy

Today’s Top Story: On Friday, the Labor Department reported that the U.S. economy added a seasonally adjusted 12,000 new jobs in October, falling short of expectations and sparking discussion about how it will impact Tuesday’s election. The unemployment rate remained steady at 4.1%.

Reporting from the Right: ‘Disaster’: Final Jobs Report Before Election Shows Just 12,000 Jobs Added In October (Daily Wire)

Reporting from the Left: The U.S. added just 12,000 jobs in October as a strike and hurricanes hit employment (NBC News)

RIGHT-LEANING SENTIMENT

November Surprise

The Top Argument From The Right: November surprise: Dismal jobs report gives Trump last-minute political ammunition to fire at Harris, Paul Steinhauser, Fox News: “With four days to go before Election Day, former President Trump's campaign quickly took aim at Vice President Kamala Harris over the latest unemployment figures from the federal government, which indicated only 12,000 jobs were created in October. The jobs created last month were far below estimates of up to 120,000 and were the lowest in four years. Fueling the nosedive were disruptions from devastating Hurricanes Helene and Milton, the crippling Boeing strike and other labor disputes. However, regardless of the contributing factors, the figures offered the Trump campaign instant ammunition to fire at Harris, as two major party presidential nominees remain locked in a margin-of-error race in both the national polls and surveys in the crucial seven battleground states that will likely determine the White House winner. ‘BRUTAL’ was the instant reaction from the Trump campaign on social media, as it promoted clips of coverage of the jobs report from the cable news and business networks' morning shows.

Honorable Mention #2: The Jobs Numbers May Cool Harris’s Momentum on ‘the Economy’, Noah Rothman, National Review.

LEFT-LEANING SENTIMENT

Bad Timing for Harris

The Top Argument From The Left: Shock US jobs data could not have come at worse time for Kamala Harris, Larry Elliott, The Guardian: “…the poor jobs figures could not have come at a worse time for Kamala Harris. To be sure, there were special factors that explained why the world’s biggest economy added only 12,000 new jobs in October. Last month two severe hurricanes – Helene and Milton – hit the US. The temporary lay-offs caused by the disruption led to an estimated 20,000 to 50,000 drop in payrolled employees. Manufacturing employment fell by 46,000 – with most of the drop the result of a strike at the aerospace giant Boeing. But that will come as little comfort to the Harris camp in a knife-edge race for the White House. Even allowing for the hurricanes and the Boeing strike, the employment data was weak. … Harris can now expect Donald Trump to weaponise the jobs figures in the last few days of campaigning. Despite being by far the best-performing G7 economy since the pandemic, many American voters feel worse off as a result of increases in the cost of living. Special factors or not, the weak jobs figures will do nothing to counter that impression.”

Honorable Mention #1: What makes the new monthly jobs report less reliable than most, Steve Benen, MSNBC.

FLAG THIS

Economic Priority

The economy ranks as the most important of 22 issues that U.S. registered voters say will influence their choice for president. It is the only issue on which a majority of voters, 52%, say the candidates’ positions are an “extremely important” influence on their vote. Another 38% of voters rate the economy as “very important,” which means the issue could be a significant factor to nine in 10 voters. Voters view Donald Trump as better able than Kamala Harris to handle the economy, 54% versus 45% (Gallup).

Do you believe the latest jobs report will be a significant factor affecting either candidate?

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WATERCOOLER

Tut’s Tomb, Fuel Fizzle, Mona Lisa’s Name

On This Day in 1922, British archaeologist Howard Carter and his workmen discover a step leading to the tomb of King Tutankhamen in the Valley of the Kings in Egypt.

POWERED BY MASTERWORKS

How has the art investing platform Masterworks been able to realize an individual profit for investors with each of its 23 exits to date?

Here’s an example: an exited Banksy was offered to investors at $1.039 million and internally appraised at the same value after acquisition. As Banksy’s market took off, Masterworks received an offer of $1.5 million from a private collector, resulting in 32% net annualized return for investors in the offering.

Every artwork performs differently — but with 3 illustrative sales (that were held for 1+ year), Masterworks investors realized net annualized returns of 17.6%, 17.8%, and 21.5%.

Masterworks takes care of the heavy lifting: from buying the paintings, to storing them, to selling them for you (no art experience required).

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The content is not intended to provide legal, tax, or investment advice. Past performance is not indicative of future performance. Investing involves risk.

“Net Annualized Return” refers to the annualized internal rate of return, or IRR, net of all fees and costs, to holders of Class A shares from the primary offering, calculated from the final closing date of such offering to the date the sale is consummated. A more detailed breakdown of the Net Annualized Return calculation for each issuer can be found in the respective Form 1-U for each exit. The 3 median returns above represent the ones closest in percentage to the median of the 12 exits with holding periods over 1 year.

Masterworks internally appraises artworks that are held by entities administered by Masterworks Administrative Services on an ongoing basis, and obtains an independent review of appraisals by a third-party appraiser on an annual basis.Appraisals are prepared in accordance with the 2024-2025 Uniform Standards of Professional Appraisal Practice (“USPAP”) developed by the Appraisal Standards Board of the Appraisal Foundation, although it is noted that there are potential conflicts of interest given that some or all individual members of the appraisal committee are employees of Masterworks and Masterworks retains an ownership interest in the subject artworks as well as ownership of the Masterworks Platform.

Masterworks compiles historical data from public auctions to produce metrics that we believe can be helpful in measuring and analyzing historical trends in artist markets and the historical price appreciation of specific artworks.

See important Reg A disclosures at masterworks.com/cd.

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