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The Fed may raise rates further, bond yields are at 15-year highs, Americans have almost depleted their savings, Goldman blames 0-DTE options for the S&P selloff, NYC banned TikTok on government devices, and Coinbase won approval to offer crypto futures trading in the US.

Want to sharpen your private equity knowledge? Wharton Online and Wall Street Prep just opened enrollment for their upcoming Fall Cohort for the Private Equity Certificate Program. Interested? Enroll today!

Let’s dive in.

Before The Bell

Markets

• US stocks continued their fall yesterday as investors digested the Fed’s July minutes that hinted at additional rate hikes

  • It was a second-straight losing session for all three major indexes

• Asian stocks dropped with Japan’s Nikkei down 1.5%, Hong Kong’s HSI down 1.4%, and Shanghai’s SSE down 0.8% due to fears of contagion in the Chinese economy

• US 10Y yield hit its highest since 2008

• Oil prices fell over renewed fears about the Chinese economy

Earnings

• Target stock rose 3% after reporting higher-than-expected Q2 earnings and improved margins, although it lowered its fiscal year guidance and reported less revenue than anticipated after sales fell 4.9% YoY (BRRN)

• Progressive stock rocketed 9% after it reporting net premiums written of $5.95B, up 21% from $4.93B a year earlier (BRRN)

• TJX Companies stock was up 4% after beating Q2 analyst expectations, reporting a 23% increase in profits and raising full-year outlook thanks to strong customer spending on off-price goods (CNBC)

• Cisco shares were up 3% after beating Q4 analyst revenue and adjusted earnings expectations, with product orders up 30% sequentially (BRRN)

• JD.com shares were down 3% despite beating Q2 revenue estimates thanks to its focus on lower-priced products during China’s economic slowdown (RT)

• What we're watching this week:

  • Today: Walmart, Applied Materials, Ross Stores, Dole, Keysight Technologies

  • Friday: Deere & Company, Palo Alto Networks, Estee Lauder, XPeng

• Full calendar here

Headline Roundup

• Fed saw ‘significant’ inflation risk that may merit more hikes (BBG)

• Bond yields hit highest since 2008, adding pressure to borrowing costs (WSJ)

• Americans have almost depleted excess savings, SF Fed study says (BBG)

• Hawaii fires hit regional bank already rocked by turmoil (BBG)

• Goldman blames zero-day options for fueling S&P selloff (BBG)

• Target, much like Bud Light, is stung by culture wars (WSJ)

• Milei vows to pay Argentin’s debt, shutter central bank (BBG)

• Inflation Reduction Act spurs $500B in investments - and much is going to underserved communities (CNBC)

• NYC bans TikTok on government-owned devices over security concerns (RT)

• BRICS nations to meet in South Africa seeking to blunt Western dominance (RT)

• Abortion pill access preserved by US Appeals Court, with limits (BBG)

• Wegovy could prevent up to 1.5M heart attacks, strokes over 10 years (CNBC)

• Goldman CEO’s most loyal deputy is tested by mutinous partners (BBG)

• Federal judge asks if Elon Musk was trying to ‘cozy up’ to Trump during criminal probe (CNBC)

• Texas approves plan to mandate Tesla tech for EV chargers despite opposition (RT)

A Message From Wall Street Prep

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Wharton Online and Wall Street Prep are excited to announce that enrollment is now open for the upcoming Fall Cohort for the Private Equity Certificate Program.

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In addition, students will have access to our exclusive alumni benefits, which include peer-to-peer networking events, invitation-only LinkedIn and Slack groups, and exclusive recruiting events with top private equity recruiting firms.

Use code LITQUIDITY to save $300 when you register for the program and be sure to enroll in the program by September 5th to secure your spot!

Deal Flow

M&A / Investments

• Seven US states requested the FTC to block Kroger’s $24.6B acquisition of supermarket chain Albertsons (RT)

• ArcelorMittal, the world’s second-largest steelmaker, is considering an offer for US Steel Corp, which has already received a $7.8B offer from privately-held Esmark (RT)

• US pipeline operator Energy Transfer will buy rival Crestwood Equity Partners in a $7.1B deal, including debt (RT)

• Intel cancelled its $5.4B acquisition of Israel contract chipmaker Tower Semiconductor after their merger agreement expired without Chinese regulatory approval (RT)

• EQT Corp, the largest US producer of natural gas, won FTC antitrust approval to close its deal to purchase the $5.2B Quantum Energy-backed THQ Appalachia I and its associated infrastructure (RT)

• PE firms Warburg Pincus and Kelso & Co are in talks to acquire Mexican Coca-Cola bottler Femsa’s US packaging and food services business for ~$5B (BBG)

• UK multinational defense contractor BAE Systems is in talks to buy beer can supplier Ball Corp’s aerospace division for as much as $5B, which will allow the firm to focus on packaging operations (BBG)

• Singapore’s state investment firm Temasek Holdings is considering a sale of some of its LNG subsidiary firm Pavilion Energy’s assets for at least $2B (BBG)

• Petroleum refiner HF Sinclair will acquire all remaining outstanding shares of smaller oil pipeline operator Holly Energy Partners in a $1.4B cash-and-stock deal (RT)

• Investment firm GQC Partners purchased an 8.1% stake in India’s Adani Power for $1.1B (RT)

• Co-founder and CEO of Nu Holdings, David Velez, sold 3% of his stake in the standalone digital bank for $191M (BBG)

• EY rejected PE firm TPG’s preliminary expression of interest to purchase a stake in its consulting arm (FT)

• ChatGPT maker OpenAI acquired Global Illumination so that the digital products startup’s team can work on OpenAI’s core products (RT)

• Hyundai Motor will buy General Motor’s Talegaon plant, allowing the automaker to exit India (RT)

• Aldi’s US unit will buy Southeastern Grocers, the owner of the Winn-Dixie and Harveys supermarket chains, adding 400 stores to its US footprint (BBG)

VC

• BitGo, a provider of wallet solutions for the digital asset economy, raised a $100M Series C at a $1.75B valuation led by Goldman Sachs, Craft Ventures, DRW, Galaxy Digital Ventures, Redpoint Ventures, and Valor Equity Partners (FN)

• Battery materials producer Mitra Chem raised a $60M Series B led by General Motors (FN)

• Instylla, a startup developing next-generation liquid embolics for peripheral vascular embolotherapy, raised a $30M round led by Delos Capital (FN)

• MacroFab, a provider of a manufacturing platform for building electronics, raised $20M in growth financing from Trinity Capital (FN)

• Highlight, an in-home product testing company, raised an $18M Series A led by Acre Venture Partners and HearstLab (TC)

• Clinical trials startup Lindus Health raised an $18M Series A led by Creandum (FN)

• Quantum algorithms startup Phasecraft raised a $16.6M Series A led by Playground Global (FN)

• DynamoFL, a startup helping enterprises train large language models, raised a $15.1M Series A led by Canapi Ventures and Nexus Venture Partners (TC)

• Sapphire Technologies, a developer and manufacturer of energy recovery systems for hydrogen and natural gas applications, raised a $10M Series B led by Energy Capital Ventures (FN)

• AI-powered search and discovery startup Marqo raised a $5.2M seed round led by Blackbird Ventures (FN)

• ElectroTempo, an EV software company, raised a $4M seed round led by Buoyant Ventures (BW)

• Dental staffing platform Toothio raised a $4M seed round led by Craft Ventures (FN)

• P6 Technologies, a provider of product life cycle assessment software, raised a $3.3M seed round led by Goose Capital (FN)

• ShipCalm, an e-commerce fulfillment and third-party logistics provider, raised a $2M financing round from Montage Capital (BW)

• In-Seam, a shopping platform for stylists, raised a $2M pre-seed round led by Far Out VC (FN)

• Vegapay, a fintech startup providing a digital lending and card management platform, raised a $1.1M pre-seed round led by Eximius Ventures (FN)

IPO / Direct Listings / Issuances / Block Trades

• Hong Kong-listed luggage maker Samsonite International is exploring the possibility of a second listing in the US (BBG)

• Alibaba’s work communication platform DingTalk will split from the company’s cloud division and may possibly IPO (RT)

SPAC

• Electric vertical takeoff and landing aircraft developer Horizon Aircraft is merging with Pono Capital III in a $216M deal (GNW)

Debt

• Nigerian state energy company NNPC will receive a $3B loan from African Export-Import Bank to help stabilize the exchange rate market (BBG)

• New Development Bank, a financial institution created by the BRICS bloc of emerging markets, raised $94M at its first South African bond auction (BBG)

Bankruptcy / Restructuring

• Hawaiian Electric is in talks with restructuring firms and exploring options to address the utility’s financial and legal challenges arising from the Maui wildfires (WSJ)

• A judge converted retail chain Christmas Tree Shops' bankruptcy to a Chapter 7 liquidation (RT)

Fundraising

• South African startup accelerator and early-stage investor Founders Factory Africa raised $114M to ‘scale its model to better serve founders across the African tech ecosystem’ (TC)

Crypto Corner

• Coinbase won regulatory approval to offer crypto futures trading in the US (RT)

• PayPal will halt UK crypto purchases through its platform while it works to comply with new crypto promotion laws (RT)

• Asset manager Valkyrie filed for an Ethereum Strategy ETF (RT)

Exec’s Picks

• Mark your calendars: this Saturday, August 19th, Litquidity is hosting the inaugural Lit Cup at Bond East Hampton! Join us for a full day of tennis, padel, music, food, and drinks by clicking here.

• Vox shared an interesting piece about how publishing scammers are using AI to scale their grifts.

• Michael Batnick explained why increasing interest rates didn’t tank the economy.

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