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Congress is planning a tax cut for private credit investors, investment groups are calling for a tax exemption for passive income, JPMorgan is struggling to trade private credit, and Zohran Mamdani won the NYC mayor Democratic primary in a surprise upset.

Mizuho's US Industrials Equity Research Analyst Brett Linzey explored the fear of tariffs from an institutional perspective. It's a short but insightful read.

Let's dive in.

Before The Bell

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Markets

• US stocks rallied on news of Israel-Iran ceasefire and constructive comments from J Pow

  • Nasdaq 100 hit a new ATH

• MSCI World index traded near its recent ATH

Earnings

• FedEx beat Q2 earnings and revenue estimates but withheld FY guidance amid global uncertainty, citing continued B2B demand pressure from a weak US industrial economy (BBG)

• What we're watching this week:  

  • Today: General Mills, Jefferies

  • Thursday: Nike, Walgreens Boots Alliance

• Full calendar here

Prediction Markets

• It's that time of the year, folks.

• Trade your predictions on a range of events, only on Kalshi. Sign up with code LIT and get a $20 bonus when you trade $100.

Headline Roundup

• Zohran Mamdani won NYC mayor Democratic primary in huge upset (NYT)

• J Pow reiterated no rush to cut rates as Fed awaits tariff clarity (BBG)

• US Congress plots big tax cut for private credit investors (FT)

• Investment groups called for exemption of passive income from US tax bill (RT)

• JPMorgan traders are getting shut out of private credit market (BBG)

• JPMorgan is re-securitizing MBSs (BBG) 

• Europe bond sales are piling up in sign it's business as usual (BBG)

• Japan's 20Y bond sale shows market is still wary on longer bonds (BBG)

• Investors are most positive on EM in over two years (BBG)

• Legendary Andurand hedge fund’s losses worsened to 60% (BBG)

• 'Bond King' Bill Gross warned on 10Y Treasuries but is bullish on stocks (BBG)

• Big US banks are expected to ace stress tests, boost dividends (RT)

• Big banks race to appease Republicans amid fears of Trump (WSJ)

• US Q1 foreign direct investment fell sharply amid tariff uncertainty (RT)

• US Q1 current account deficit surged to record high (RT)

• Trump's CFPB rollback has cost Americans $18B (RT)

• College QBs are the newest VC investors (FOS)

• PGIM will merge fixed income and private credit into $1T credit platform (RT)

• Vanguard cut fund fees as Europe competition heats up (FT)

• Nomura shareholders rejected proposal to change firm's name (BBG)

• Private funds for retail investors jumped to $350B, up 60% from 2022 (BBG)

• BlackRock rolled out Texas ETF as state draws capital, companies (RT)

• OpenAI and Jony Ive were accused of trying to 'bury' rival start-up (FT)

• Citadel Securities asked SEC to stop IEX options exchange (BBG)

• EU is investigating Italy's share sale in BMPS after large investors were shut out of the bidding process (FT)

• Student loan delinquencies have reached a record high at 31% (BBG)

• US home-price gains slowed the most since 2023 (BBG)

• Ex-CFA Institute exec was charged with embezzling millions (BBG)

A Message from Mizuho

April and May have been a whirlwind for markets. Since President Trump's April 2 "Liberation Day" announcement – which imposed a baseline 10% tariff on nearly all foreign imports – tariffs have become a central driver of uncertainty and volatility.

Currently, the US has reached a trade deal with the UK and is reportedly close to agreements with key partners like India. The US and China's trade war, once red-hot, also appears to be cooling, with the US reducing tariffs to 30% from 145%, and China cutting rates to 10% from 125%.

While these developments have brought some immediate relief – and a surge in consumer confidence – macroeconomic uncertainty continues to loom large. Many major players believe a recession is likely and have questioned whether the economy can absorb such rapid shifts in global trade policy. For investors, the landscape has led to key questions.

Deal Flow

M&A / Investments

• Spain blocked lender BBVA's $16B unsolicited takeover of peer Banco Sabadell for at least three years, delaying integration of the two lenders

• Chip design company Ambarella, valued at ~$2.6 billion, is exploring strategic options including a sale

• A fund controlled by minority partner Lingong Group will buy Volvo’s 70% stake in Chinese machinery company SDLG for $837M

• Saudi investment firm Jadwa Investment Co. is seeking to sell its 51% stake in Saudi pharmaceutical firm UniPharma at a ~$267M valuation

• Best Buy is divesting its at-home care unit Current Health, which it acquired for $400M in 2021

• US life insurer Brighthouse Financial narrowed bidders to investment firm TPG and Abu Dhabi-backed financial investor Aquarian Holdings as it explores a full sale

• Starbucks is not currently considering a full sale of its China operations

VC

• Blockchain development company Digital Asset, raised a $135M strategic investment from finance titans including Citadel Securities, DRW, Tradeweb Markets, IMC, Optiver, Goldman Sachs and Virtu Financial

• Arine, an AI-driven medication optimization platform, raised a $30M Series C led by Town Hall Ventures

• Enter, a German platform for energy-efficient renovations and digital building intelligence, raised a $23M Series B from Coatue, Target Global, and others

• Novoloop, a startup upcycling plastic waste into usable materials, raised a $21M Series B led by Taranis

• Eventual, a Python-native open source data processing engine, raised a $20M Series A led by Felicis

• Paraform, a hiring marketplace for recruiters, raised a $20M Series A led by Felicis

• Property-focused AI tech startup aedifion raised a $20M Series B led by Eurazeo

• Quinn, a financial planning and advice platform, raised an $11M seed round led by Viola Fintech

IPO / Direct Listings / Issuances / Block Trades

• Malaysia's largest port operator MMC Ports confidentially filed for an IPO that could raise ~$2B at a $7B valuation in the country's biggest IPO in a decade

• Tata Capital, the financial services unit of Indian conglomerate Tata, received regulator approval for its planned $2B IPO which could be India's biggest listing this year

• Building products distributor QXO is seeking to raise $2Bin a share sale as it pursues a takeover

• Apollo-backed German car parts retailer Autodoc postponed its $450M Germany IPO

• Aumovio, the automotive unit of German automotive parts manufacturing giant Continental, is set to go public in September 

• Uber-backed EV bike/scooter startup Lime hired banks for a US IPO

Debt

• Mexico sold $4.5B of international bonds for the third time this year

• Toyota sold $1.5B of investment-grade bonds to finance development of a futuristic Japan city 

• Vista Equity Partners-backed internet security platform KnowBe4 tapped JPMorgan to refinance $1.46B of private credit from Blue Owl, Blackstone, and Carlyle with lower yield syndicated bank debt

• UK bank Standard Chartered is planning a $190M risk transfer tied to a $2B corporate loan portfolio through a two-tranche SRT

• Mumbai International Airport, a subsidiary of Adani Airport Holdings, secured a $750M investment from a group led by Apollo

• MIT secured a $500M revolving credit facility

• Indonesia's SWF Danantara is extending a $405M loan to distressed airline Garuda Indonesia to support its financial turnaround and fleet expansion efforts

• Maroc Telecom, Morocco's largest telecoms operator, raised $330M in its first private bond issuance on the domestic market

• Trump Organization fully paid off its $114M mortgage on the 40 Wall Street skyscraper in NYC, originally originated by Ladder Capital Finance, clearing one of Trump's largest debts

• Hong Kong developer The Parkview Group sought loans from auction house Sotheby's backed by 200 artworks by the likes of Picasso

Bankruptcy / Restructuring / Distressed

• F21 OpCo, the former operator of Forever 21's US stores, won court approval to liquidate and partially repay creditors, with unsecured creditors set to receive 70% of net proceeds

• A PE-backed JV involving CareerBuilder and Monster, filed for Chapter 11 bankruptcy with plans to sell itself

Fundraising / Secondaries

• China's SWF CIC canceled its planned $1B sale of American PE LP stakes tied to funds like Carlyle, KKR, and TPG

• Trilantic Capital Partners' spinoff energy transition investor Greenbelt Capital Partners hit a $1B hard cap for its first independent fund

• Inc. plans to launch a real estate fund with two partners, tapping investor demand for a piece of Japan’s booming property market.

• Japanese brokerage Daiwa Securities will collaborate with developer Samty Holdings and investment firm Hillhouse Investment to raise a $690M real estate fund 

• VC firm Project A raised a $373M fund to invest in European startups, with a focus on defense

• Mexican VC firm Nazca is seek to raise $150M for  new VC fund

• Saudi PE firm Jadwa Investment Co. plans to raise $104M to fund new deals and portfolio expansions in the Middle East

Crypto Sum Snapshot

• Chainlink and Mastercard just opened crypto to 3B users

• Central bank body BIS delivered a stark stablecoin warning

• Crypto firm BitGo's assets in custody surged past $100B

• Check out our Crypto Sum newsletter for the full stories on everything crypto!

Exec’s Picks

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• Goldman Sachs CEO David Solomon absolutely blasted Europe regulations in French newspaper opinion piece. A good read if you're curious about the business sentiment in Europe (or if you want to brush up on your French).

Financial Services Recruiting 💼

If you're a junior banker looking for your next career move, check out Litney Partners, a recruiting firm established by Litquidity and Whitney Partners (the oldest purely financial services executive search and consulting firm).

We aim to place strong candidates across private equity, hedge funds, venture capital, growth equity, credit, and investment banking.

We're currently seeking talent for some incredible roles. Head over to Litney Partners to drop your resume / create your profile and we'd love to get in touch!

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*DISCLAIMER: Investment advice provided by Autopilot Advisers, LLC ("Autopilot"), an SEC-registered investment adviser. Past performance does not guarantee future results. Investing carries risks, including loss of principal. As always, be smart out there. Litquidity is compensated to promote AutoPilot. Compensation details available upon request.