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Good Morning,

Markets tumbled yesterday after the Fed surprised with a hawkish stance on rate policy ahead.

Invest in institutional-caliber private markets with 10 East, a membership-based investment platform offering targeted exposure to PE, VC, and more.

Let's dive in.

Before The Bell

Markets

• US stocks plunged yesterday after the Fed cut rates for a third-straight time but indicated only two rate cuts for 2025 

  • Dow and S&P saw their biggest daily decline since the August selloff

  • Nasdaq posted its biggest daily decline since July

  • Dow fell for a tenth-straight day in its longest losing streak in 50 years 

  • VIX index jumped past 27 to the highest since August

  • Traders reduced bets of 2025 rate cuts from 49 bps to 33 bps and priced in a rate cut pause for January

• Treasuries saw the biggest selloff in eleven years

  • US 10Y yield rose to the highest since May

  • US 2Y yield rose 11 bps to 4.35%, converging with fed funds rate

• UK 10Y gilt yield surged to 4.55% on stagflation concerns 

  • UK-Germany 10Y spread widened to 230 bps, the highest since 1990 

• Gold fell to a one-month low 

• Dollar jumped 1.2% to hit a two-year high

• Brazilian real plunged 25% YTD to become the world's worst-performing currency amid broad economic woes

• Cocoa futures soared passed $12k/ton to a fresh record on supply concerns

Earnings

• Micron plunged 21% after weak Q2 guidance offset a Q1 earnings beat on weak near-term growth in its data centers and AI chip ventures (CNBC) 

• General Mills fell 3% despite beating Q2 EPS estimates as it lowered its 2025 outlook on higher CapEx aimed at sustainable growth (BRN)

• What we're watching this week:  

  • Today: Nike, FedEx, CarMax, Accenture

• Full calendar here

Prediction Markets

• SCOTUS agreed to hear TikTok's appeal against the US ban at the last minute!

• Trade your predictions on a range of notable events legally, only on Kalshi. Get a $20 bonus when you deposit $100 with code LIT on signup!

Headline Roundup

• Fed cut rates by 25 bps to 4.25%-4.5% range (CNBC)

• Fed forecast only two cuts for 2025 and estimate neutral rate at 3% (CNBC)

• Fed cut reverse repo rate by 30 bps to 4.25% to match lower end of fed funds rate (RT)

• J Pow is not ready to speak on Trump's economic policy (RT)

• UK inflation hit an eight-month high of 2.6% (RT)

• Reeves will take UK bankers to China to expand financial services ties (FT) 

• Macro hedge funds are a top choice for investors for 2025 (RT)

• Asia hedge funds are betting on AI leaders in Chinese big tech (RT)

• Blue chip firms are ditching ESG terms from loans (BBG)

• IPO blowout forecast for 2025 threatened by Trump tariffs (BBG)

• Barclays annual bonuses are expected to increase by 20% (BBG)

• Mideast IPO momentum faces valuation test after $13B year (BBG)

• China LGFVs are issuing record amounts of local debt (BBG)

• Top Australia pensions will add private investments in 2025 (BBG)

• Short-term BNPL lenders get boost from long-term private credit (WSJ)

• Saba Capital pressured seven UK investment trusts to fire their boards (BBG)

• Canyon Partners CIO Todd Lemkin will depart after two decades (BBG) 

• Howard Lutnick's son takes CEO role at Cantor Fitzgerald SPAC (BBG)

• Microsoft acquired twice more Nvidia AI chips than Big Tech rivals (FT)

• SCOTUS will hear TikTok's challenge to US ban (CNBC)

• Salesforce will hire 2k people to sell AI products (CNBC)

• US warned credit card issuers to not devalue rewards (RT)

• EU escalates pressure on Apple to open up OS to rivals (BBG)

• Apple hit out at Meta's numerous interoperability requests (RT)

• OpenAI makes ChatGPT available for calls and texts (CNBC)

• Musk tapped loyalists to boost staffing for DOGE effort (BBG)

• Insurers are deserting homeowners as climate shocks worsen (NYT)

• US sued CVS for a decade of filling and billing illegal opioid prescriptions (RT)

• China is rapidly expanding nuclear forces (FT)

• An OpenAI whistleblower was found dead by suicide (CNBC)

• J Pow is reportedly a 'huge fan' of Call Her Daddy podcast (VU)

A Message from 10 East

Where Sophisticated Investors Access Private Markets

10 East is a co-investment platform where sophisticated investors access private market investments alongside a veteran team with a 12+ year track record of strong performance across over 350 transactions. The firm is led by Michael Leffell, former Deputy Executive Managing Member of Davidson Kempner.

Members have the flexibility to participate on a deal-by-deal basis across private equity, credit, real estate, and venture capital.

Benefits of 10 East membership include:  

• Flexibility – members have full discretion over whether to invest on an offering-by-offering basis. 

• Alignment – principals commit material personal capital to every offering.  

• Institutional resources – a dedicated investment team that sources and diligences each offering.

There are no upfront costs or commitments associated with joining 10 East.

Exec Sum readers can join 10 East with complimentary access here.

Deal Flow

M&A / Investments

• Germany called on Italy's UniCredit to sell its stake in $19B-listed Commerzbank after UniCredit increased its stake to 28%

• Apollo is in exclusive talks to acquire Canadian waste management firm GFL Environmental's environmental services unit for $5.6B

• Australia's Macquarie is exploring a $5B sale of Midwest telecom carrier Altafiber

• Luxury goods giant Kering is seeking an outside investor for a new entity to house its $4.2B real estate assets

• $3.4B-listed LatAm payments provider DLocal is exploring a sale

• Blackstone acquired a Ritz-Carlton resort in Japan from Kanehide Holdings in a $130M deal

• Chevron agreed to swap stakes in numerous Australian energy projects with Australia's Woodside Energy and pay Woodside $400M 

• Czech billionaire Daniel Kretinsky agreed to buy Italian utility Enel's 50% stake in Slovakia's main energy utility Slovenske Elektrarne

• Glencore is in talks to sell its Pasar copper business in the Philippines to a domestic buyer

VC

• Oman SWF OIA acquired a stake in Musk's XAI 

• Cloud AI startup Vultr raised a $333M round at a $3.5B valuation led by AMD and LuminArx

• AI startup SandboxAQ raised $300M at a $5.3B valuation from Fred Alger Management, Mumtalakat, Parkway Venture Capital, and more

• Avara, a decentralized L2 network for social and consumer apps infrastructure, raised a $31M round led by Lightspeed Faction

• AI-powered pharmacy navigation platform Scripta Insights raised a $17M Series B led by Aquiline

• Event-native data platform Kurrent raised a $12M round led by Crane Venture Partners

• Waste management software startup Hauler Hero raised a $10M seed round led by I2BF Ventures

• Orqa, a Croatian startup developing advanced autonomous drones, raised a $6.4M seed round led by Lightspeed Ventures

• Legaltech startup Lightbringer raised a $4.2M round led by Luminar Ventures and Alliance VC

• Hamming.ai, an AI voice agent reliability platform, raised a $3.8M seed round led by Mischief

IPO / Direct Listings / Issuances / Block Trades

• Siemens plans to sell a 6% stake in Siemens Energy for $2.6B to help fund its $10B acquisition of software maker Altair Engineering

• Indian retailer Vishal Mega Mart surged 44% in its trading debut day after its $944M Mumbai IPO

• Bain-backed Japanese chipmaker Kioxia rose 10% in its trading debut after its $800M Tokyo IPO

• Homebuilder Lennar plans to spin off most of its land holdings into a separate public REIT, Millrose Properties

• German car parts giant Continental plans to list its automotive unit in Frankfurt by Q4 2025 and reiterated sales plans for its materials unit Original Equipment Solutions

Debt

• Swedish landlord SBB and bondholders agreed to a $2.9B debt swap

• Italian state-controlled rail operator Ferrovie is set to receive a $2.1B loan from Italian lender Intesa Sanpaolo backed by Italy's state insurance-financial group Sace

• El Salvador reached a $1.4B loan deal with IMF which includes concessions over Bitcoin

• Indian shadow bank Shriram Finance raised $1.3B in a offshore multi-currency loan

Bankruptcy / Restructuring / Distressed

• Indonesian clothes maker Pan Brothers avoided bankruptcy after creditors agreed to restructure $537M of debt

• Argentina's Cia Latinoamericana de Infraestructura y Servicios won approval from international bondholders for a $358M debt restructuring

• Distressed Hong Kong developer New World is in talks with banks to extend maturities on some bilateral loans

Fundraising

• Early-stage VC Slow Ventures is seeking to raise $275M across its sixth fund and an opportunity fund

Crypto Corner

• El Salvador's IMF loan includes numerous concessions on Bitcoin (WSJ)

• MicroStrategy's Michael Saylor is willing to advise Trump on crypto (TS)

• Luxury brands are considering accepting payments in crypto (RT)

• A BlackRock ETF bought munis issued through blockchain (BBG)

Exec’s Picks

• Check out the inflation and interest rates tracker for your country, updated after the Fed's high-profile rate cut.

• Jonathan Clements wrote a great piece reminding us that valuations aren't going to help anyone time the stock market.

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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