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Good Morning,

BNPL defaults are on the rise, Moody's downgraded major Wall Street banks, UK and EU struck a post-Brexit 'reset' deal, and retail traders bought a record $4.1B in US stocks in one day.

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Let's dive in.

Before The Bell

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Markets

• US stocks closed mostly flat yesterday as traders digested Moody's US credit downgrade 

  • S&P rose for a sixth-straight day

• Canada's TSX index hit a new ATH on Friday

• Poland's WIG index is up 28% YTD to become one of the world's best-performing indexes this year

• US 30Y yield topped 5% to hit its highest since November 2023

• Bitcoin hit a four-month high

Earnings

• What we're watching this week:  

  • Today: Pony.ai, Palo Alto Networks, Home Depot

  • Wednesday: Baidu, Snowflake, Target, Zoom, TJX, Canada Goose

  • Thursday: Workday, Ralph Lauren, TD Bank Group, Ross, Intuit

  • Friday: Booz Allen Hamilton

• Full calendar here

Prediction Markets

• Fed officials are signaling no rate cuts until at least September, but few contrarians are still betting on further economic chaos.

• 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

• Fed officials expect no rate cuts until at least September (BBG)

• Moody's downgraded JPMorgan, Bank of America, and Wells Fargo (RT)

• Corporate bonds sees muted response to Moody's US downgrade (RT)

• Mortgage bonds see muted response to Moody's US downgrade (BBG)

• Ivy League endowments are selling PE stakes amid buyout downturn (FT)

• Retail traders bought a record $4.1B in US stocks yesterday (BBG)

• Jamie Dimon expects earnings growth to collapse (CNBC)

• Rise in loans to US non-bank financial groups raises systemic risk fears (FT)

• JPMorgan investor day sheds light on CEO succession audition (WSJ)

• China cut benchmark lending rates for first time since October (RT)

• JPMorgan sees IB fees falling by mid-teens (BBG)

• SEC considers relaxing rules for investing in private funds (WSJ)

• Japan 20Y bond auction saw the lowest demand since 2012 (BBG)

• Brazil is emerging as leader in rare-earths as miners rush in (WSJ)

• Activist Starboard settled proxy battle with chipmaker Qorvo (RT)

• MBK Partners' founder was barred from leaving South Korea amid investigation into PE bond sale (BBG)

• UBS deployed AI analyst clones (FT)

• Klarna losses doubled after more consumers fail to repay BNPL loans (FT)

• Saudi PIF aims to double Europe investments (BBG)

• UK and EU struck a post-Brexit 'reset' deal (NYT)

• Israel plans to take over all of Gaza (WSJ)

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Deal Flow

M&A / Investments

• Toyota's chairman Akio Toyoda is set to acquire Toyota Industries in a $41.4B management-led buyout

• European mass media firm Altice France is considering selling a controlling stake in  French mobile carrier SFR at a $34B valuation, including debt

• Blackstone agreed to acquire New Mexico and Texas-focused utility TXNM Energy at an $11.5B valuation, including debt

• Electronics manufacturer Sanmina agreed to acquire ZT Systems' server-manufacturing business from AMD in a $3B deal

• $1B-listed office landlord Paramount Group is exploring strategic options including a sale

• Energy investment firm Five Point Infrastructure is exploring a sale of Texas gas infrastructure operator Northwind Midstream at an over $2B valuation, including debt

• Tech-focused PE firm Thoma Bravo is nearing a deal to acquire GTCR-backed insurTech Itel for ~$1.3B, including debt

• Manhattan property developer RXR agreed to acquire NYC's 590 Madison Avenue office tower from pension fund STRS Ohio for ~$1.1B

• US Commerce Secretary Howard Lutnick divested his stakes in financial services firm Cantor Fitzgerald for over hundreds of millions of dollars

• European life insurance giant Chesnara is exploring a potential acquisition of HSBC's UK life insurance unit, which could be worth several hundred million dollars

• Volkswagen is considering selling or finding a partner for its design and engineering unit Italdesign as part of its broader European restructuring efforts

• Ares acquired a majority stake in commercial landscaper Landscape Workshop

VC

• Stord, a commerce enabling platform for omnichannel brands, raised a $200M Series E at a $1.5B valuation led by Strike Capital

• Owner, a startup helping restaurants grow, raised a $120M Series C at a $1B valuation led by Meritech and Headline

• Dazos, an all-in-one CRM platform for behavioral health providers, raised a $25M Series A led by Radian Capital

• VFlowTech, a startup building long duration energy storage solutions, raised a $20.5M round led by Granite Asia

• German AI-powered maintenance software startup remberg raised a $17M Series A+ led by Acton Capital and Oxx

• Thndr, an Egyptian retail investment platform, raised $15.7M in funding led by Prosus Ventures

• BreachRx, an incident response platform for enterprises, raised a $15M Series A led by Ballistic Ventures

• VUZ, a startup offering immersive video experiences from red carpets and football stadiums, raised a $12M pre-Series C led by IFC

• Persist.AI, a startup using AI to streamline drug formulation development, raised a $12M Series A led by Spero Ventures

• LIS Technologies, a laser technology company, raised $11.9M in funding from Innovating Capital

• AqlanX, an AI-driven enterprise solutions company, received a $10M strategic investment from Lakeba Group

• Finwave Semiconductor, a semiconductor manufacturing company, raised an $8.2M round from Fine Structure Ventures, Engine Ventures, and Safar Partners

• Button Finance, a fintech focused on home equity lending, raised a $5M Series A led by Hildene Capital Management

• Theo AI, a litigation prediction platform, raised a $4.2M seed round led by NextView Ventures and Collide Capital

• Mode Mobile, a platform for consumers to monetize their time and attention, raised a $3M strategic investment from Mercurius Media Capital

IPO / Direct Listings / Issuances / Block Trades

• Chinese EV battery giant CATL jumped 14% in its Hong Kong debut after raising $4.6B the biggest listing YTD

• Conglomerate Dubai Holding increased the size of its residential REIT IPO to $584M amid strong investor demand

• Hong Kong insurer FWD Group Holdings filed again for a Hong Kong IPO to raise several hundred million dollars

Debt

• Brookfield, Blackstone, and JPMorgan will lend $1B in private credit to back Apollo's $2B acquisition of electric utility PowerGrid Services from PE firm Sterling Group

• Carlyle's FOF arm AlpInvest plans to sell a $1B collateralized fund obligation backed by cash flows from its buyout secondaries funds

• King Street-owned data center operator Colovore raised a $925M debt facility from Blackstone

• JPMorgan launched a $500M leveraged loan to support FanDuel-owner Flutter Entertainment's acquisition of Playtech's Italian gambling business

Bankruptcy / Restructuring / Distressed

• KKR aims to cut about $10.7B of struggling UK utility Thames Water's debt as part of its recovery plan

• Regeneron Pharmaceuticals agreed to acquire 'substantially all' of bankrupt gene-testing firm 23andMe's assets for $256M

Fundraising

• Blue Owl Capital raised $7B for its third digital infrastructure fund

• Chicago investment firm Mesirow raised over $1.2B for its fifth real estate fund targeting apartment complexes in US metropolitans

• Secondaries investor TPG NewQuest raised $980M for its fifth Asia-focused secondaries fund

• Redpoint Ventures raised $650M for its tenth flagship fund

• VC Headline Asia raised $145M for its fifth fund to invest in APAC tech startups 

• Morpho Investments, a PE firm founded by the ex-CEO of The Sovereign Fund of Egypt, raised a $55M first close for its debut fund 

• British YouTube group Sidemen launched Upside VC, a new VC firm to target consumer-focused tech startups

Crypto Sum Snapshot

• JPMorgan changed course on bitcoin

• US is investigating the Coinbase hack

• Stablecoin bill advanced in Senate in big win for crypto

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

Exec’s Picks

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• Capital Allocators sat down with KKR's head of Global Client Solutions Eric Mogelof to discuss KKR's pivot to private wealth. An insightful conversation covering the hottest trend on the street: alternatives for individual investors.

Analyst Opportunity – VC / Growth Equity 💼

• We are working with an anonymous VC / growth equity firm based in Los Angeles to help hire an analyst

• The analyst will support the investment team throughout full deal lifecycles, including sourcing, screening, due diligence, and investment committee preparation

• The ideal candidate has one year of investment banking or consulting and a passion for tech / software. Learn more and apply at Litney Partners

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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.