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Good Morning,

The US DOE now says that Covid-19 likely originated in a lab, the DOJ is preparing an antitrust suit to block Adobe's Figma acquisition, the PCE index rose by 5.4% in January, S&P 500 earnings beats are at a 15-year low, Jamie Dimon thinks US interest rates will hit 6%, and Blackstone's Steve Schwarzman took home $1.26B in 2022.

If you're looking for a great book about investing written by a legendary financier, check out David Rubenstein's latest book: How To Invest.

Let's dive in.

Before The Bell

Markets

• US stocks declined sharply on Friday as hot consumer spending and inflation data all but guaranteed higher Fed interest rates

  • All three major US indexes lost ~3% in their worst week of 2023

  • The S&P posted its third straight down week

  • The Dow lost 3% in its biggest weekly decline since September, ending lower for a fourth straight week for its longest losing streak in 10 months 

• The MSCI World Index and pan-European Stoxx 600 ended the day 1.17% and 1% lower respectively

• The Hang Seng index and China’s CSI 300 index also shed over 1% each

• 2Y Treasury yields climbed to 4.826% to hit 2007 highs

• Gold dropped to its lowest level in eight weeks

• The dollar index strengthened by 0.6% to a seven week high

Earnings

• What we're watching this week:  

  • Today: Berkshire Hathaway, Zoom, Workday

  • Tuesday: Target, Rivian

  • Wednesday: RBC, Salesforce, Lowe's, Kohl's 

  • Thursday: TD Bank Group, Costco, Best Buy, Dell, Broadcom, Nordstrom, Victoria's Secret

• Full calendar here

Headline Roundup

• Fed favorite PCE index rose 5.4% in January (WSJ)

• Consumer spending rose by a higher than expected 1.8% in January (CNBC)

• Incoming BOJ governor plans to maintain ultra-loose monetary policy (FT)

• S&P 500 earnings beats hit a 15-year low (CNBC)

• US firms are increasing bets on China's post-pandemic consumer rebound (WSJ)

• Jamie Dimon expects US interest rates to hit 6% (RT)

• Institutional investors plan to increase allocations to credit and global macro HFs (RT)

• Investors piled $354B into cash since Ukraine war (RT)

• New hedge fund launches hit their lowest level since 2010 (II)

• Natural gas futures prices have plunged 80% since August (AX)

• Adani Group's market losses have reached $145B since short seller attack (FT)

• Blackstone Founder/CEO Steve Schwarzman took home $1.26B in 2022 (RT)

• Goldman Sachs expects to incur $2.3B in losses from legal proceedings (RT)

• Morgan Stanley is cooperating with US regulators on block-trading probe (RT)

• Citigroup's last leveraged loan trader in Europe resigned (BBG)

• Missing Chinese banking tycoon Bao Fan is 'co-operating' with a Chinese investigation (FT)

• World Bank promised 'concessionality' in debt restructuring for distressed economies (RT)

• Ericsson will lay off 8.5k employees (RT)

• Twitter laid off 50+ from engineering teams (TI)

• Vice Media CEO Nancy Dubuc will depart the company (AX)

• US millennials' debt surpassed $3.8T in Q4 2022 (WSJ)

• US Department of Energy believes Covid originated from a lab leak (WSJ)

A Message From Simon & Schuster

David M. Rubenstein, cofounder of The Carlyle Group, speaks with some of the most successful, forward-thinking investors across a range of finance disciplines.

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Deal Flow

M&A / Investments

• Pfizer is in early-stage talks to acquire global biotech firm Seagen to acquire its pioneering targeted cancer therapies; Seagen currently has a market cap of ~$30B (WSJ)

• The DOJ is preparing an antitrust lawsuit seeking to block Adobe’s $20B purchase of design software startup Figma (BBG)

• The FCC put off consideration of HF Standard General’s proposed $5.4B purchase of broadcaster Tegna on concerns that the transaction may increase prices for consumers, in a delay that may kill the deal (BBG)

• US software provider Cvent rejected a $3.9B bid from Blackstone (RT)

• State power firm China Southern Power Grid is considering a binding bid for Italian energy company Enel’s distribution operations in Peru at a potential ~$2.5B valuation (BBG)

• Canada’s TD Bank received all regulatory approvals to complete its $1.3B acquisition of boutique investment bank Cowen (RT)

• Telecom Italia (TIM) will provide KKR with financial data to help it improve its offer for TIM’s network grid (RT)

• Indian telecommunications tycoon Sunil Mittal is seeking to merge his financial services unit Airtel Payne Bank into fintech firm Paytm’s payments bank as a plan to obtain a stake in Paytm (BBG)

VC

• Digital payments processor Stripe is close to raising $4B at a $55B valuation from investors including Thrive Capital (RT)

• WorkLLama, a provider of AI-driven talent, marketing, and relationship management software, raised a $50M round (BW)

• Voicemod, a startup offering tools to create entirely synthesized voices, raised $14.5M in a post-Series A expansion round by Leadwind (TC)

• NeoSwap AI, an AI-powered NFT trading startup, raised a $2M pre-seed round at a $15M valuation led by Digital Asset Capital Management and AngelHub (PRN)

• South African healthtech startup Envisionit Deep AI raised $1.7M in funding from New GX Ventures SA (TC)

IPO / Direct Listings / Issuances / Block Trades

• South Korea’s Doosan Robotics is considering a 2023 IPO that could raise $766M+ (BBG)

• Chinese cloud service provider Shenzhen Cloudsky Technologies is considering an IPO that could raise ~$200M (BBG)

SPAC

• Prison phone firm ViaPath Technologies is in talks to merge with Tristar Acquisition I Corp in a potential $1.5B+ deal (BBG)

• Environmental technology company CleanBay Renewables is in talks to merge with BurTech Acquisition Corp in an up to $600M deal (BBG)

Debt

• Indian lender HDFC Bank raised $750M through a dollar bond sale (LM)

Bankruptcy / Restructuring

• Cinema chain Cineworld told shareholders to expect wipe out in equity value as it looks to exit from Chapter 11 bankruptcy protection after it failed to find a buyer for the whole company (RT)

Fundraising

• Blackstone is considering raising up to $2B for a new open-ended European infrastructure fund (BBG)

• United Airlines launched United Airlines Ventures Sustainable Flight Fund with over $100M to invest in start-ups focused on decarbonizing air travel (PRN)

Crypto Corner

• IMF laid out a nine-point crypto action plan, recommending against legal tender status (RT)

• Bankrupt crypto lender BlockFi accused creditors of being ‘divorced from reality,’ with creditors responding with 'temper tantrum' accusations (TB)

• Voyager and FTX reached an agreement over a $445M loan payment (CS)

• Nexus Mutual paid out over $5M to FTX and BlockFi users (BW)

• Oldest European crypto exchange The Rock Trading paused operations amid liquidity issues (CD)

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