It's a Mag 7 Market

Wall Street traders are turning to short-dated debt to trade the Fed pivot, the Magnificent Seven are carrying the market, Gazprom set a record high gas flow to China, Citi employees on edge about layoffs can work remote until 2024, Chanos is bullish on US gaming, and Robinhood is wooing wealthier clients from bigger brokerages.

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Litquidity Capital
December 18, 2023

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Good Morning,

Wall Street traders are turning to short-dated debt to trade the Fed pivot, the Magnificent Seven are carrying the market, Gazprom set a record high gas flow to China, Citi employees can work remote until 2024, Chanos is bullish on US gaming, and Robinhood is wooing wealthier clients from bigger brokerages.

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Before The Bell

As of 12/15/2023 market close.

Markets

  • US stocks mostly rose, closing out their seventh-straight winning week on the back of a Fed-sparked rally

    • The Nasdaq rose 0.4%, while the S&P fell 0.01%

Earnings

  • What we're watching this week: 

    • Today: Heico

    • Tueday: FedEx, Accenture 

    • Wednesday: General Mills, Micron, MillerKnoll, BlackBerry

    • Thursday: Nike, Carnival 

  • Full calendar here

Headline Roundup

  • To trade the Fed’s pivot, Wall Street turns to short-dated debt (BBG)

  • It’s the Magnificent Seven’s market, and the other stocks are just living in it (WSJ)

  • Russia’s Gazprom says gas flow to China set new daily record (BBG)

  • Despite record home prices, housing is about to drag inflation down (WSJ)

  • Citigroup employees, on edge over layoffs, told they can work remotely until the new year (CNBC)

  • Chanos turns bullish on US gaming due to bad bettors, FT says (BBG)

  • Floundering weed stocks test Wall Street’s faith in 2024 rebound (BBG)

  • New York Times staffers form journalistic ‘independence caucus’ amid concerns over union’s actions (WSJ)

  • Recent data shows AI job losses are rising, but the numbers don’t tell the full story (CNBC)

  • Robinhood woos wealthier clients from bigger brokerages (WSJ)

  • Deloitte is looking to AI to help avoid mass layoffs future (BBG)

  • Tesla’s self-driving tech has competition (WSJ)

  • China’s iPhone ban accelerates across government and state firms (BBG)

  • Israel pushes back on increasing European calls for cease-fire (BBG)

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Deal Flow

M&A / Investments

  • Nordic investment firm EQT is leading bidding as PE firms compete for a stake in the media rights business of the Bundesliga, Germany’s main football competition; EQT’s proposal values the business at ~$14B (BBG) 

  • Docusign, a $12.9B software company that handles electronic signatures, is considering a sale (BBG) 

  • Illumina will divest cancer diagnostic test maker Grail, which it acquired for $7.1B; US appeals court found that Illumina’s acquisition violated antitrust laws and sent the case back to the FTC (RT & BBG)  

  • Payments technology firm Global Payments denied a report that it was in talks to acquire $6.1B peer Shift4 Payments (RT) 

  • Abu Dhabi National Oil agreed to acquire a 50% stake in the fertilizer unit of European chemical producer OCI for $3.6B cash (BBG) 

  • Indonesian billionaire Sukanto Tanoto-owned Royal Golden Eagle, a resource-based industrial group, offered to acquire tissue and diaper maker Vinda International for up to $3.4B (RT) 

  • Health Care Service and Elevance Health are competing to acquire Cigna Group’s Medicare Advantage business, which may fetch over $3B (BBG) 

  • Tokyo Gas’s subsidiary Tokyo Gas America will acquire Rockcliff Energy II for ~$2.7B to expand its US shale operations (BBG) 

  • Permian Basin explorer Callon Petroleum, which has a ~$2.3B market value, is exploring strategic options amid takeover interest from rivals (BBG) 

  • Belgian media company DPG Media will acquire RTL Group’s Dutch business for $1.2B cash (BBG) 

  • German medical technology firm Carl Zeiss Meditec acquired Dutch Ophthalmic Research Center, a developer of devices for eye surgery, for ~$1.1B (RT) 

  • Greek yogurt maker Chobani acquired ready-to-drink coffee maker La Colombe for $900M to expand its beverage business (RT) 

  • Swedish mining equipment maker Epiroc will acquire Stanley Black & Decker's STANLEY Infrastructure for $760M (RT)

VC

  • Totus Medicines, a company using DNA-encoded covalent libraries to discover small molecule drugs, raised a $66M Series B led by DCVC Bio (VC)

  • UK-based methane emissions tech startup Mootral raised a $20M Series B led by King Philanthropies (TC)

  • Tetra, an NYC-based home services company helping homeowners transition from fossil fuels to clean energy, raised a $10.5M seed round led by Greycroft, Gutter Capital, Lerer Hippeau, and 1sharpe Capital (FN)

  • Neurophos, an AI computation solutions company, raised a $7.2M seed round led by Gates Frontier (FN)

  • Prevu, an NYC-based provider of a savings-oriented home buying platform, raised a $6M Series A from Citi, RiverPark Ventures, Metropolis Ventures, and more (FN)

  • Redactable, an NYC-based provider of an AI-driven web application to protect sensitive documents, raised a $5.5M seed round led by Gradient Ventures (FN)

  • Dr. Treat, a personalized veterinary care platform, raised a $2M seed round led by Y Combinator, Liquid2, Epic Ventures, and more (VC)

  • MushroomRoot, a single-ingredient meat company, raised a $1.5M seed round from Chris Paul, Aly Raisman, Tom Colicchio, and more (VC)

  • Lenoss Medical, a Rhode Island-based startup developing biologic cementless technology to treat spinal injuries, raised a $1.3M Series A led by Xcellerant Ventures (VC)

Debt

  • A group led by KKR purchased a ~$7.2B portfolio of recreational vehicle loans from Canada’s Bank of Montreal (BBG) 

  • State-owned TC Ziraat Bankasi, Turkey’s largest lender by assets, secured a $1.9B loan from Deutsche Bank (BBG)  

  • British fiber-optic network challenger Gigaclear lined up $1.9B in new debt financing, which it will use to expand (BBG) 

  • State-owned petroleum firm Petroleos del Peru is considering issuing $1B in bonds next year as it undergoes a severe cash crunch (BBG)

Bankruptcy / Restructuring

  • Creditors are preparing to take control of the venture capital arm of bankrupt SVB Financial, which has ~$10B AUM, after a process to sell SVB Capital fell through (WSJ) 

Fundraising

  • Arbor Investments, a food and beverages-focused PE firm, is seeking to raise $1.5B for its sixth main buyout fund, Arbor Investments VI (WSJ) 

Crypto Corner

  • US regulators must finally decide whether to approve a physically-backed Bitcoin ETF on January 10 (BBG) 

  • SEC denied a request from Coinbase for tailored crypto regulations (CD)

Exec’s Picks

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