Gloomy Spirits

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Good Morning,

Fed independence is a top election concern for Bridgewater, emerging market investors are shunning China, BoC increased the pace of rate cuts, Warren Buffett declined to endorse any candidate, Tesla rebounded from its H1 slump, and Spirit is looking to sell itself in bankruptcy.

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Let's dive in.

Before The Bell

As of 10/23/2024 market close.

Markets

  • US stocks fell yesterday as higher yields spooked markets 

    • Nasdaq had it worst day in six weeks

    • Dow had it worst day in over a month

    • Small-cap Russell 2000 fell for a fifth-straight day for its worst streak since April

  • Gold suffered its worst drop in eleven weeks

  • Dollar hit a three-month high versus yen

Earnings

  • Tesla rose 12% after beating Q3 EPS estimates and forecasting higher FY deliveries on a rebound in EV demand (BBG)

  • Boeing reported a $6B Q3 loss, it biggest since Covid, and intends to focus on its core business as it struggles with quality and strikes (CNBC

  • IBM missed Q3 revenue estimates due to disappointing consulting and infrastructure sales, though its software business outperformed on strength in Red Hat (CNBC

  • AT&T rose 5% after beating Q3 EPS estimates on strong wireless subscriber growth driven by demand for premium plans (RT)

  • Coca-Cola beat Q3 EPS and revenue estimates as higher prices offset sluggish demand (CNBC

  • What we're watching this week: 

    • Today: UPS, Southwest, American Airlines

  • Full calendar here

🇺🇸 Election Forecast

Headline Roundup

  • BoC cut rates by 50 bps to 3.75% (BBG)

  • US firms point to steady economy but see lower profit margins (RT)

  • Investors are piling into non-China EM funds (FT)

  • IMF fiscal chief says US debt sustainable, but time for consolidation (RT)

  • SCDI bonds return after 40 years amid wave of sovereign defaults (RT)

  • UK is probing investment barriers into the country (FT)

  • South Korea struggles to rebound from contraction (BBG)

  • Bridgewater says Fed independence is top concern in US election (RT)

  • Warren Buffett won't endorse investment products or candidates (RT)

  • HSBC CEO says senior layoffs inevitable amid reorganization (RT)

  • HSBC east-west overhaul reignites break-up debate (FT)

  • Italy's largest bank Intesa Sanpaolo will layoff 10% of employees (FT)

  • Home sales are on track for the worst year in three decades (WSJ)

  • Companies look past chatbots for AI payoff (WSJ)

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Deal Flow

M&A / Investments

  • German engineering group Siemens is in talks to acquire $9B-listed software firm Altair Engineering

  • $6.5B-listed specialty chemicals manufacturer Element Solutions is exploring a sale

  • $3.6B-listed offshore driller Transocean is in talks to merge with $2.6B-listed rival Seadrill 

  • Singapore SWF GIC and Australia's Macquarie are seeking to sell their ~30% stake in Philippine renewable energy firm EDC, which could fetch $2B

  • Pharma giant Merck agreed to acquire Modifi Biosciences in a $1.3B deal

  • HMC Capital agreed to acquire data center group Global Switch Australia in a $1.3B deal

  • Advent, Blackstone, CVC, L Catterton, GBL, and PAI Partners are bidding for German vitamins maker Orthomol, whose owners are seeking $1.1B in a sale

  • Singapore-owned CityFleet Networks will acquire UK-based private taxi firm Addison Lee for $348M

  • Shell agreed to acquire power plant operator RISEC 

  • Norway's renewable energy giant Statkraft plans to divest its onshore wind, solar and battery business in the Netherlands and Croatia, and its hydropower and solar assets in India

VC

  • Nimble, an AI robotics and autonomous e-commerce fulfillment startup, raised a $106M Series C at a $1B valuation led by FedEx 

  • Redaptive, an energy-as-a-service provider, raised $100M in funding from CPP

  • Mortgage servicing platform Valon raised a $100M Series C led by WestCap 

  • UK savings and investment app Moneybox raised a $91.2M round from Apis Partners and Amundi

  • Fixify, an automated IT help desk platform, raised a $25M Series A led by Costanoa Ventures, Decibel Partners, and Paladin

  • AI-powered meeting notepad Granola raised a $20M Series A led by Spark Capital 

  • Sensei, a Portuguese contactless store platform, raised a $16M Series A led by BlueCrow Capital 

  • Adden Energy, a startup developing lithium SSBs, raised a $15M Series A led by At One Ventures 

  • Dunia Innovations, an AI-powered lab to discover new materials, raised $11.5M led by Elaia and redalpine 

  • Validation Cloud, a Web3 data and AI startup, raised a $10M round led by True Global Ventures 

  • Keel, a UK no-code platform for building custom operational software, raised a $6M seed round led by Earlybird and LocalGlobe 

IPO / Direct Listings / Issuances / Block Trades

  • Chinese car manufacturer Chery Automobile is preparing a Hong Kong IPO at a potential $14B valuation

  • Hengrui Pharmaceuticals is considering a second listing in Hong Kong that could raise ~$2B

  • Vietnam plans to inject $815M into state-owned Vietcombank

  • Platinum Equity-backed IT firm Ingram Micro raised $409M at a $5.2B valuation in a US IPO

Debt

  • Public pension Florida SBA is seeking to sell $3B-$4B of private credit stakes in what could be the largest such secondaries sale  

  • Deutsche Bank is in talks to sell $1B of CRE loans

  • Indian infrastructure firm GMR Group will raised $750M in debt from SWF ADIA

  • Brazilian airline Azul is in talks with multiple parties to raise ~$400M in debt financing

Bankruptcy / Restructuring

  • Spirit Airlines is in talks to file for Chapter 11 to facilitate a sale to rival Frontier

  • PE-backed American Tire Distributors filed for Chapter 11 bankruptcy for the second time since 2018 with plans to sell itself to lenders Guggenheim, KKR, Monarch, Sculptor, and Silver Point

Fundraising

  • Brookfield is seeking $1B for an infrastructure finance solutions fund

  • PE firm Trivest Partners closed its third growth investment fund at $730M

  • Chemistry, a VC founded by ex-Index, a16z and Bessemer partners, raised $350M for its debut fund to invest in Series A startups

Crypto Corner

  • Citigroup debanked Ripple CEO Brad Garlinghouse over crypto ties (CD)

  • Bitcoin options markets eye $80k price regardless of election outcome (BBG)

  • Crypto's political money cannon still has millions to deploy (BBG)

  • Nigeria dropped charges against a Binance exec detained for eight months (BBG)

Exec’s Picks

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