To Bear or Not To Bear

US stocks flirted with bear market territory on Friday, Amazon is cutting back on warehouse leases, JM Smucker recalled some peanut butter, the US is airlifting baby formula from Europe, Biden signed the Ukraine aid package, and Apple wants to boost production outside of China.

Litquidity Capital
May 23, 2022

Together with

Good Morning,

US stocks flirted with bear market territory on Friday, Amazon is cutting back on warehouse leases, the US is airlifting baby formula from Europe, Biden signed the Ukraine aid package, and Apple wants to boost production outside of China.

Just a few more days until the unofficial start of Summer, intern szn, and the three day Friday Beers x Litquidity Memorial Day Weekend bender.¬†ūü§Ě

Let's dive in.

Before The Bell

As of 5/20/2022 market close.

If you want to learn more about crypto trading strategies and the world of DeFi, check out our Foot Guns newsletter.

Markets

  • US stocks closed relatively flat in a wild session Friday that saw the S&P 500 briefly slip into bear market territory before reversing course late in the afternoon
    • Inflationary pressures continue to be key market drivers, repeatedly appearing in this quarter‚Äôs earnings reports (such as Walmart and Target last week)
    • Inflationary pressures have also been worsened by a surge in energy prices, which have been exacerbated largely by the Ukraine-Russia war
    • While the tech sector continues to be the biggest loser, the drawdown has spread to most other industries as well; energy is the only positive S&P sector YTD

Earnings

  • What we‚Äôre watching this week:
    • Mon: Zoom
    • Tues: Best Buy, Nordstrom
    • Weds: Nvidia, Snowflake
    • Thurs: Alibaba, Macy‚Äôs, Dollar Tree, Dollar General
    • Fri: Canopy Growth
  • Full calendar here

Headline Roundup

  • US corporate credit spreads hover around 'Danger Zone' (BBG)
  • Amazon aims to sublet, end warehouse leases as online sales cool (BBG)
  • JM Smucker recalls some Jif peanut butter products (BBG)
  • US baby-formula airlift due to begin with flight from Europe (BBG)
  • Apple looks to boost production outside China (WSJ)
  • The space industry is on its way to reach $1T in revenue by 2040 (CNBC)
  • Biden signs $40B Ukraine aid package during trip to Asia (CNBC)
  • Biden tops list of Americans banned from traveling to Russia; Trump not on it (CNBC)
  • US gets first 70K pounds of baby formula to counter shortage (BBG)
  • Hyundai plans $5B investment in US on mobility such as autonomous driving and robotics (CNBC)
  • HSBC suspends banker over climate change comments (FT)

A Message From Marco

Intern szn 2022 is right around the corner. 

Trying to plan something for your team beyond a happy hour or virtual cocktail making class? Book something extraordinary with Marco Experiences. 

Marco is building the all-in-one employee experiences management platform supported by a robust experiences marketplace and dedicated account management. 

In-person experiences available for teams in NYC and SF; Virtual experiences available for teams everywhere. Don't rely on your jaded first year analysts to plan something epic when they should be busy working on pitch books! 

Deal Flow

M&A / Investments

  • Semiconductor giant Broadcom is in advanced talks to acquire cloud company VMware, which currently has a market cap of ~$40B (BBG)
  • Siemens Energy offered to buy the shares in Spanish wind-turbine maker Siemens Gamesa Renewable Energy it doesn‚Äôt already own at a $12B+ valuation (BBG)
  • Prosus is looking to sell its Russian classifieds ads business Avito at a potential $6B valuation (BBG)
  • CD&R and TPG offered to buy all of the outstanding shares of animal-health technology and services provider Covetrus at a $2.9B valuation (BBG)
  • Saudi Arabia‚Äôs Public Investment Fund agreed to buy a 16.9% stake in Kingdom Holding Co., the investment company of Prince Alwaleed Bin Talal, for $1.5B (BBG)
  • Oakley Capital is weighing strategic options for female-focused fitness app Gymondo, including a possible merger (BBG)
  • Zurich Insurance agreed to sell its Russia business to 11 members of the unit‚Äôs team, as the company exits the heavily sanctioned nation (BBG)
  • Advertising consultancy firm Next Fifteen Communications agreed to buy British advertising group M&C Saatchi in a $387M deal (RT)
  • Singapore fintech¬†MatchMove Pay¬†agreed to buy fellow e-commerce startup¬†Shopmatic¬†for $200M (BBG)

VC

  • Elon Musk‚Äôs SpaceX is seeking to raise up to $1.7B at a ~$127B valuation to fund capital intensive projects (CNBC)
  • KLOwen Braces,¬†a startup creating customized braces, raised a $10.5M Series A led by¬†Columbia Pacific Advisors¬†(BW)

Fundraising

  • Global institutional investment firm Taconic Capital Advisors closed a $500M distressed and opportunistic real estate fund (BW)
  • Pear,¬†a Palo Alto-based VC firm, is planning to raise a $410M fund (TC)

Crypto Corner

  • CFTC charges two men with $44M cryptocurrency ‚ÄėPonzi scheme‚Äô (TBC)
  • Waning institutional demand forcing high-yield crypto accounts to slash rates (TBC)
  • NFT artist Beeple‚Äôs Twitter account hacked in phishing scam (DC)
  • ECB president Lagard says crypto is 'worth nothing' and should be regulated (BBG)

Exec's Picks

  • Lit recently invested in Hedge, a collaborative trading platform where you can make a hedge fund with your friends by pooling money & investing together. Guess what? Thanks to Republic, you can invest alongside me in Hedge's current round too! Interested? Click here to learn more.
  • We just launched our group chat on a new chat platform called¬†Odyssey. If y'all want to chat with Lit, Mark, and other like-minded individuals about all things Wall Street (gossip, bonuses, job openings, etc.), you're welcome to join 500+ of us by¬†clicking this link.
  • NEW SHOE ALERT: We dropped the official 'Sleds of the Summer' in partnership with Del Toro earlier this month. Perfect for weddings and smart casual wear in the Hamptons or Nantucket. Comes in men and women cuts. Cop the limited edition shoes here.

The Hiring Block

If you're looking to break into finance, lateral, or move out, check out our job board on Pallet, where we curate highly relevant roles for you. We've got 40+ jobs spanning IB, S&T, VC, tech, private equity, DeFi, crypto, CorpDev and more. We sift through all the noise on LinkedIn, Indeed, Monster, etc. so you don't have to.

And for those who want a more of a "match-making" approach, we're now launching a Talent Collective. It's essentially a reverse-job board where top companies ask to be introduced to you based on candidate profiles. This is a free, application-only community targeted at finance professionals looking to transition to VC / tech / web3 (we'll have broader collectives as more companies join the platform).

Candidates: you are welcome to apply here and can choose to stay anonymous for privacy concerns.

Companies: if you're hiring, join our collective and start getting recurring drops of amazing talent who are searching for new gigs - actively or passively. Apply now, as spots are limited. 

Meme Cleanser

Catch the latest episode of our Big Swinging Decks podcast, presented by¬†CoinFLEX.US, on¬†Spotify,¬†Apple, and YouTube ūü§Ě¬†

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