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Jamie Dimon and Janet Yellen weren’t fans of Fitch’s downgrade, the US boosted the size of quarterly bond sales for the first time in 2.5 years, European IPOs hit lowest level since 2009, Asian investors are ramping up dollar hedges, Ackman is short US 30Y bonds, and US banks are betting big on AI applications.

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Let’s dive in.

Before The Bell

Markets

• Stocks plunged yesterday as Fitch Ratings' downgrade of US debt sparked a wide market sell-off

  • Nasdaq posted its worst day since February, while the S&P had its worst day since April

• The pan-European Stoxx 600 declined by 1.4%

• UK's FTSE 100 closed 1.4% lower

• US 30Y yields rose to 4.2% to highest level YTD

• US 10Y yields hit highest level since November, remaining above 4% for the second-straight day

Earnings

• Qualcomm beat its fiscal Q3 earnings expectations, but its revenue and Q4 guidance fell short after sales fell 25% YoY; its stock dropped 7% (CNBC)

• Paypal stock fell 7% after Q3 operating margins were reported below expectations due to competition, although it slightly beat earnings and revenue estimates (BBG)

• DoorDash rose 5% after raising FY guidance, reporting record Q2 orders, and achieving revenue that was in line with analyst expectations (AP)

• Robinhood posted a surprise Q1 profit but monthly active users fell to 10.8M, 1M less than the previous quarter; its stock fell ~7% (BRN)

• CVS beat Q2 earnings and revenue estimates thanks to a heavy cost-cutting program as it pushes deeper into health-care services (CNBC)

• Shopify reported better-than-expected Q2 results and forecasted higher-than-expected growth (RT)

• Carlyle fell 8% after its Q2 distributable earnings fell 26% YoY due to a slump in asset sales, although results exceeded expectations (RT)

  • Today: Apple, Amazon, AB InBev, Wayfair

  • Friday: Dominion Energy, Nikola

• Full calendar here

Headline Roundup

• Jamie Dimon called Fitch Ratings' US downgrade ‘ridiculous’ (CNBC)

• Janet Yellen called Fitch's US downgrade 'flawed and entirely unwarranted' (BBG)

• US boosted size of quarterly bond sales for the first time in 2.5 years (BBG)

• Small businesses boost US private payrolls in July (RT)

• European IPOs fell to lowest level since 2009 (FT)

• Asian investors ramp up dollar hedges despite hedging costs hitting a 14-year high (BBG)

• China’s services activity surprisingly expanded in July (BBG)

• Bill Ackman is short on US 30-Year bonds (BBG)

• US banks are betting big on AI applications (AX)

• PE and hedge funds brace for coming SEC overhaul (WSJ)

• Apple’s Goldman Sachs-backed savings account topped $10B in deposits (BBG)

• Apple moves cautiously on AI as peers race ahead (AX)

• Evergrande Property Services plunged 50% after the stock resumed trading for first time since March 2022 (BBG)

• Meta prepares chatbots with personas to try to retain users (FT)

• Wells Fargo pledges $60M for worker re-entry program (RT)

• Dam failures show harsh reality of aging infrastructure in US (WSJ)

• Amazon employees sell secret info for marketplace sellers (CNBC)

• Labor Department sued UnitedHealth in rare federal action (BBG)

• Trucking giant Yellow’s shutdown could cost taxpayers money (WSJ)

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Deal Flow

M&A / Investments

• Bain Capital and Cinven, the PE owners of Stada Arzneimittel, are weighing options for the $10.9B German drugmaker, including a potential sale or IPO (BBG)

• UK’s CMA is investigating Cameco Corp and Brookfield Renewable Partners’ $7.9B acquisition of nuclear power plant equipment maker Westinghouse Electric (RT)

• Carlyle Group is considering selling a minority stake in claims management company Sedgwick, they purchased a majority stake in the company for $6.7B in 2018 (BBG)

• Apollo Global Management, KKR, and Bain Capital are among shortlisted bidders for Japanese tech company Fujitsu’s $2.7B, 50% stake in chip packaging unit Shinko Electric Industries (BBG)

• Japanese trading company Itochu will pay as much as $2.7B to take its software unit Itochu Techno-Solutions private (BBG)

• Coca-Cola Europacific Partners and Aboitiz Equity Ventures will jointly acquire Coca-Cola Beverages Philippines for $1.8B (RT)

• E-cigarette company Juul Labs, which almost went bankrupt last year, is working with Jefferies to raise ~$1B at a significantly lowered valuation (BBG)

• Mitsubishi UFJ Financial Group will buy a stake in US Bancorp for $936M, solidifying its alliance with the US lender (BBG)

• Lions Gate Entertainment is close to a deal to buy Entertainment One, a film and TV studio, from toymaker Hasbro for slightly less than $400M (BBG)

• France is looking to block US manufacturer Flowswerve’s all-cash $247M acquisition of French nuclear reactor parts supplier Velan (BBG)

• UK hedge fund Oceanwood Capital Management is selling up to a 4.4% stake Spanish bank Unicaja worth up to $136M (RT)

• ExxonMobil put its shale assets in Argentina under review and is considering an exit (BBG)

VC

• Jerry, a provider of car services app, raised a $110M Series C2 led by Park West Asset Management (FN)

• Healthmap Solutions, a national population health management company focused on kidney disease, raised a $100M round led by WindRose Health Investors (FN)

• LightForce Orthodontics, the first company to 3D print braces, raised an $80M Series D led by Ally Bridge Group (BW)

• Chemify, a startup digitizing chemistry, raised a $43M Series A led by Triatomic Capital (BW)

• Inworld, a generative AI platform for creating NPCs, raised a ~$30M round at a $500M valuation led by Lightspeed Venture Partners (TC)

• Ortho Nebraska, a musculoskeletal care provider, raised $20M in funding from InTandem Capital Partners (BW)

• Axuall, a workforce intelligence company, raised a $20M Series B-1 led by Frist Cressey Ventures (FN)

• Stay Ai, a customer loyalty operating system for Shopify brands, raised a $15.1M Series A led by Telescope Partners and others (FN)

• Local Logic, a location intelligence insights provider, raised a $13M Series B led by GroundBreak Ventures (FN)

• DebtBook, a startup helping finance teams in local government and higher education manage debt in the cloud, raised a $12.5M Series A-1 led by Elephant Partners (FN)

• Medical technology startup Entia raised a $12M round led by BGF (FN)

• Data quality startup Lightup raised a $9M Series A led by a16z and Newland Ventures (TC)

• Canadian infrastructure condition assessment and risk management startup Niricson raised a $7.5M Series A led by MUUS Climate (FN)

• Likeminded, a mental health solutions company, raised a $6.5M seed extension led by Holtzbrinck Digital (FN)

• Traction, a Nigerian provider of a merchant solution platform, raised a $6M seed round led by Multiply Partners (FN)

• Medication management platform FeelBetter raised $5.9M in funding led by Firstime Ventures and Shoni Health Ventures (FN)

• Reflex, an open-source tool to help turn Python code into web apps, raised a $5M seed round led by Lux Capital (TC)

IPO / Direct Listings / Issuances / Block Trades

• Softbank is targeting a $60B-$70B IPO of its semiconductor unit Arm as soon as September (BBG)

• Dubai’s Roads & Transport Authority selected Bank of America, Citigroup, and Emirates NBD Capital for an IPO of the city’s taxi business (BBG)

• Spanish logistics firm Bergé hired Lazard for a 2024 IPO of its automotive unit Astara (RT)

SPAC

• Aviation company Volato will merge with Proof Acquisition Corp. in a $261M deal (BBG)

Debt

• Wells Fargo Bank sold $5B worth of bonds in a benchmark-sized four-part deal comprised of senior notes (BBG)

• Cruise operator Carnival sold a $1.31B leveraged loan led by JPMorgan and $500M in junk bonds to replace expensive pandemic-era debt and slash interest costs (BBG)

Bankruptcy / Restructuring

• Wireless venture Ligado Networks is in talks to restructure its debt and equities stack ahead of a ~$4B bond maturity in November (WSJ)

• Cinema chain operator Cineworld Group exited Chapter 11 bankruptcy with lower debt and a new management and board(RT)

Fundraising

• Italy plans to set up a $2.2B fund to bolster strategically important supply chains (RT)

• Kimmeridge Energy Management raised over $1B for Kimmeridge Fund VI to acquire and develop oil and gas assets (WSJ)

• Former Blackstone executives Gideon Berger and Min Htoo raised $1B for their debt hedge fund LuminArx Capital Management (BBG)

• Brookfield Asset Management and Sequoia Heritage partnered to launch Pinegrove Capital Partners, a $500M investment vehicle that intends to capitalize on plunging valuations of VC-backed companies (FT)

Crypto Corner

• OpenAI CEO Sam Altman’s digital ID crypto project Worldcoin will allow companies and governments to use its ID system (RT)

• VanEck, Roundhill, and Volatility Shares are among the half-dozen issuers that submitted applications for Ether-futures ETFs (BBG)

• Although crypto is illegal in China, crypto exchange Binance had $90B in cryptocurrency asset transactions in China in a single month (WSJ)

Exec’s Picks

• Financial Times covered EY’s heated CEO succession race after the company’s bungled breakup plan.

• CNBC published a list of the world’s top 200 fintech companies here.

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