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Good Morning,

Zuck says the fight with Musk is off, the US housing market is recovering, Goldman expects a Fed rate cut in Q2 2024, the latest stock market rally has stalled, Amazon is racing to catch Microsoft and Google in generative AI, airlines are adding more high-end seats, and China hedge funds are down bad.

Let’s dive in.

Before The Bell

Markets

• US stocks closed mixed as investors digested Friday’s July PPI report, which showed a 0.3% MoM increase

• September WTI oil contracts rallied for the 7th consecutive week

• Shanghai’s SSE fell 2%, Hong Kong’s HSI fell 0.9%, and Shenzhen’s SZI fell 2.2% due to deflation concerns and property developer Country Garden’s default risk

Earnings

• Soho House stock surged 15% after reported Q2 sales growth of 18.5% YoY, beating analyst expectations (BZ)

• Huawei reported modest 2.2% YoY growth in its consumer business revenue due to China’s slower-than-expected economic rebound and continued US sanctions (CNBC)

• What we're watching this week:

  • Today: Suncor Energy, Rumble

  • Tuesday: Home Depot, BHP Group, Sea Limited, H&R Block

  • Wednesday: Cisco Systems, TJX, JD.com, Target

  • Thursday: Walmart, Applied Materials, Ross Stores, Keysight Technologies

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

• Full calendar here

Headline Roundup

• US housing market recoups $3T lost in recent slowdown (BBG)

• Bond market sees no end to tumult as Fed casts a hawkish shadow (BBG)

• Goldman expects a Fed rate cut in Q2 2024 (BBG)

• The Fed is playing a waiting game to try to avoid a recession (BBG)

• Stock rally stalls despite better-than-expected earnings season (WSJ)

• Zuckerberg says ‘time to move on’ from Musk cage fight match (BBG)

• How Amazon is racing to catch Microsoft and Google in generative AI with custom AWS chips (CNBC)

• Airlines can’t add high-end seats fast enough as travelers treat themselves to first class (CNBC)

• China hedge funds in crisis after losses, US investors retreat (BBG)

• Tesla cuts price of top-end Model Ys in China in latest salvo (BBG)

• Bond traders fear ECB hawks as energy jitters return to Europe (BBG)

• Stablecoins give the US a way to make the dollar ‘relevant’ again (CNBC)

• Trump heading for Republican ‘coronation’ as 2024 rivals struggle to stop him (RT)

• Death toll from Maui fire reaches 93, authorities say effort to count the losses is just starting (CNBC)

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Deal Flow

M&A / Investments

• SoftBank Group is in talks to buy the remaining 25% stake that it doesn’t own in chip designer Arm, which will go public next month at a $60B-$70B valuation (RT)

• United States Steel Corp rejected rival Cleveland-Cliffs’ $7.3B cash and stock offer as being ‘unreasonable’ and began a formal review of strategic alternatives after receiving multiple unsolicited bids (BBG & BBG)

• The SEC is investigating Illumina’s $7.1B acquisition of cancer detection test maker Grail and requested statements and disclosures about conduct and compensation from the companies’ management (RT)

• Brookfield is attempting to assemble a consortium out of the remaining bidders (Singapore’s GIC, Antin Infrastructure Partners, and KSL Capital Partners) for its $5.1B Center Parcs resort chain after a final July bid deadline passed with no formal offers (FT)

• Bain Capital will take Asian data center operator Chindata Group Holdings private in a $3.2B cash deal (RT)

• UK’s CMA provisionally cleared UnitedHealth Group's $1.6B acquisition of healthtech firm EMIS (RT)

• PE firms General Atlantic and Dragoneer Investment Group will take Brazilian education software firm Arco Platform private at a $1.5B EV (RT)

• Fintech firm ION Group will buy Italian asset manager Prelios from US hedge fund Davidson Kempner Capital Management for ~$1.5B (RT)

• Jonathan Harmsworth, the owner the UK’s Daily Mail, is in talks with investors over a bid for the Daily Telegraph (BBG)

VC

• Neurophth, a Chinese gene therapy company for ophthalmic diseases, raised a $95M Series C+ led by Yangtze River-CMB International Industry Fund, Wuhan Optical Valley Financial Holding Group, and others (FN)

• Climate management and accounting platform Persefoni raised a $50M Series C-1 led by TPG Rise (FN)

• General Fusion, a nuclear fusion startup, raised a $25M Series F led by BDC Capital and GIC (FN)

• Kraftblock, a sustainable high-temperature energy storage startup, raised a $22M Series B led by Shell Ventures (FN)

• Data intelligence platform Tracer raised an $18.1M Series A led by NewRoad Capital Partners, Progress Ventures, and BDMI (FN)

• Flueid, a startup using data and intelligence to accelerate the verification of title across the real estate lifecycle, raised $12.5M in funding: a $10M Series B led by Aquiline Technology Growth and $2.5M in debt from Eastward Capital Partners (FN)

• Native Pet, a St. Louis-based pet supplement company, raised an $11M Series B led by CAVU Consumer Partners (FN)

• SaaS-based space utilization platform InnerSpace raised a $10M Series A led by Yaletown Partners (FN)

• Zetagen Therapeutics, a clinical-stage biopharmaceutical company focused on the treatment of metastatic cancers to bone and soft tissue organs, raised a $9.8M Series B from New York Ventures and Consolidated Capital Investments (BW)

• VR design and collaboration startup ShapesXR raised an $8.6M seed round led by Supernode Global (FN)

• Web3 transaction security platform Cube3.AI raised an $8.2M seed round from Blockchange Ventures, Dispersion Capital, Symbolic Capital, Hypersphere Ventures, and more (FN)

• Digital engagement platform Endear Health raised an $8M round led by Optum Ventures, Blue Cross of Idaho, and 8VC (FN)

• Olis Robotics, a startup developing remote robot management tech, raised a $4.1M round led by PSL Ventures (BW)

• Autonomous AI startup 11xAI raised a $2M pre-seed round led by Project A Ventures (TC)

IPO / Direct Listings / Issuances / Block Trades

• AMC stock fell over 25% after a court approved AMC’s revised stock conversion plan to convert AMC preferred equity units to common shares (BRRN)

• Mexican trucking and logistics company Grupo Traxion SAB raised $147M through issuance of new shares (BBG)

SPAC

• Spanish football team FC Barcelona’s content creation unit Barca Media is merging with Mountain & Co. I Acquisition Corp. in a $1B deal (BBG)

• Commercial stage biotech company HDL Therapeutics will merge with Swiftmerge Acquisition Corp in a $480M deal (BW)

Debt

• A group of private credit funds led by Ares Management will finance TPG’s buyout of Australian funeral home operator InvoCare with a $521M loan (BBG)

Bankruptcy / Restructuring

• Bankrupt data center operator Cyxtera Technologies is considering a sale of assets or a debt recapitalization after drawing interest from Brookfield Infrastructure Partners and Digital Realty Trust (BBG)

• British homeware and household goods discount retailer Wilko fell into administration after failing to secure emergency funding, putting 12,500 jobs and 400 stores at risk (RT)

• InteliGlas, a provider of AI products for offices, filed for bankruptcy over a dispute between a co-founder and shareholders (WSJ)

• Diamond Sports Group, a bankrupt owner of local sports channels, is expediting a Chapter 11 exit plan before the professional basketball and hockey seasons start (BBG)

Crypto Corner

• US judge sends FTX’s SBF to jail over witness tampering (CNBC)

• The SEC delayed its decision on Cathie Wood’s Ark Investment Management's spot-bitcoin ETF by several weeks to potentially months (RT)

• Brazilian legislators are moving to increase taxes on cryptocurrency held overseas (CT)

Exec’s Picks

• Tyler Cowen had an excellent conversation with Y Combinator founder Paul Graham on ambition, art, and evaluating talent.

• This Barron’s piece explains why sportsbooks love when gamblers place parlays.

• Related to Soho House’s earnings, check out Jack Raines’ satirical (?) Linkedin post (and an ensuing Benzinga article) about the company.

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