Kuro Monday

Global stock markets got cooked, traders piled into tail-risk hedges, retail brokerages were hit by outages, Google search was found to be an illegal monopoly, and Japan markets re-lived Black Monday only to rally the next day.

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Good Morning,

Global stock markets got cooked, traders piled into tail-risk hedges, retail brokerages were hit by outages, Google search was found to be an illegal monopoly, and Japan markets re-lived Black Monday only to rally the next day.

Check out salt-based electrolyte LMNT to stay healthy and hydrated, so you won't be crashing even when markets are…

Let’s dive in.

Before The Bell

As of 08/05/2024 market close.

Markets

  • US stocks plunged yesterday on mounting recession fears

    • Nasdaq posted its worst three-week stretch in two years

    • S&P and Dow posted their worst day since September 2022

    • All three major indexes logged their worst three-day losses since June 2022

    • Russell 2000 logged its first hat-trick of 3% drops since 1987

    • VIX jumped by the most ever to hit its highest since Covid

    • S&P 500 volatility spiked higher than Nasdaq 100's in a first since Covid

  • Japan's Nikkei 225 posted its worst drop in thirty-seven years 

  • Europe Stoxx 600 dropped 2.2% to a six-month low for its steepest three-day decline since June 2022

  • MSCI emerging-market index fell 4.2%, the most since February 2022

  • US 2Y-10Y yield curve briefly uninverted

  • US swap spreads tightened as investors hedged against lower rates

  • US dollar sunk to its weakest since January

  • Swiss franc hit its highest vs euro since 2015

  • Traders see an 86% chance of a 50 bps Fed rate cut in September and 88% chance of a second ECB cut 

Earnings

  • Palantir jumped 13% on a Q2 beat-and-raise thanks to unrelenting demand for AI software (BBG

  • What we're watching this week:  

    • Today: Uber, Airbnb, Reddit, Amgen

    • Wednesday: Walt Disney, Shopify, Robinhood, CVS 

    • Thursday: Eli Lilly

  • Full calendar here

Headline Roundup

  • Traders pile into tail-risk hedges after manic Monday (BBG)

  • Stock market rout has more to do with end of cheap funding than US economy (RT)

  • Retail brokers were hit by outages during US stock sell-off (FT)

  • JPMorgan CEO contenders cite intense competition amid market revival (RT)

  • Fed's reverse repo dropped to the lowest in three years (RT)

  • US banks reported the best loan demand in two years (RT)

  • Asset managers fret over lost gains as investors sit on cash (FT)

  • Carlyle doubled Q2 fundraising to over $12B (FT)

  • A US judge ruled Google's search engine is an illegal monopoly (RT)

  • Musk revived a lawsuit against OpenAI and CEO Sam Altman (CNBC)

  • CrowdStrike and Delta blame each other for flight woes (CNBC)

  • Glencore was fined $152M for a 2011 bribery scheme (FT)

  • Widespread boycotts in Muslim countries hammer western brands (FT)

  • Fannie and Freddie are set to tighten CRE lending rules (WSJ)

  • Fed released new guidance for big banks’ living will plans (BBG)

  • Activist Elliott revealed a breakdown of its Southwest ownership (RT)

  • Drop in US bond yields suggest lower mortgage rates on the horizon (RT)

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Deal Flow

M&A / Investments

  • Macquarie-backed telecom Vocus revived discussions with TPG Telecom regarding the acquisition of TPG's $4.1B non-mobile fiber assets (RT

  • PE firm Quantum Capital will buy power producer Cogentrix Energy for $3B from Carlyle (RT

  • Australia's Woodside Energy will acquire a low-carbon ammonia project in Texas from OCI Global for $2.35B (FT

  • French cosmetics giant L'Oreal will buy a 10% stake in $18.9B Swiss-listed skin company Galderma (BBG

  • PE firm Apax Partners will take tech consultancy firm Thoughtworks private in a $1.75B deal (RT

  • Swiss private bank Union Bancaire Privée will acquire SocGen's British and Swiss private banking divisions for ~$985M (FT

  • CVC will acquire drugmaker Mallinckrodt's Therakos unit for $925M (RT

  • Nonprofit Orlando Health will acquire Tenet Healthcare’s 70% ownership in Brookwood Baptist Health in Alabama for $910M (RT

  • Mexican cement maker Cemex will sell its Dominican Republic operations to Cementos Progreso and strategic partners for $950M (RT

VC

  • AI chip startup Groq raised a $640M round at a $2.8B valuation led by Blackrock (TC)

  • AI-powered location analytics startup Placer.ai raised a $75M round at a $1.45B valuation (TC)

  • Space-as-a-service startup Muon Space raised a $56.7M Series B led by Activate Capital (TC)

  • Savvy Wealth, a digital-first platform for financial advisors, raised a $15.5M round led by Canvas Ventures (BW)

  • German spacetech Dcubed raised a $10.4M Series A led by Expansion and BayBG (EU)

  • Hedra, a GenAI startupfor videos , raised a $10M seed round from Index Ventures, a16z, and others (FN)

  • Cartridge, an infrastructure provider for provable on-chain games, raised a $7.5M Series A led by BITKRAFT Ventures (FN)

  • Hyperbolic, a provider of GPU resources and AI services via cloud, raised a $7M seed round led by Polychain Capital and Lightspeed Faction (FN)

IPO / Direct Listings / Issuances / Block Trades

  • Chinese smartphone maker Honor, which was acquired for $13.8B in 2020, is preparing an IPO (RT

  • EV maker Lucid's largest shareholder PIF will inject another $1.5B (RT)

  • Adani Group's Adani Energy Solutions raised $1B in an equity placement (FT)

  • Indian electric scooter Ola Electric's $734M IPO is fully subscribed (RT

  • Continental is weighing a spin off its struggling car parts business (BBG

Debt

  • Ultra-luxury resort One Beverly Hills is seeking $5.3B in financing to speed up construction before the LA Olympics (BBG

  • Private credit funds acquired $120M of Deutsche Bank's $600M loan used to back the acquisition of Australian coal mine Illawarra (BBG

  • Bank of Montreal sold ~$383M of troubled UK water utility Thames Water’s senior debt at a 30% discount (BBG

Bankruptcy / Restructuring

  • Liquidators of failed property developer China Evergrande are seeking to recover $6B from founder Hui Ka Yan and other execs (FT

  • Italian restaurant chain Buca di Beppo filed for bankruptcy with plans to reorganize (BBG)

  • Two subsidiaries of Evergrande's EV unit began bankruptcy procedures (BBG)

Fundraising

  • VC and OpenAI-backer Thrive Capital raised $5B across two VC funds (WSJ

  • TPG's Twin Brook Capital Partners closed its fifth direct lending fund at $3.9B (BBG

Crypto Corner

  • Crypto futures saw a record $1B in liquidations (CD

Exec’s Picks

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