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Good Morning,

J Pow said more rate hikes are coming, yield curve inversion hit -1% for the first time in 40 years, US manufacturing growth is outpacing the world, BlackRock says that the Fed could raise rates to 6%, Salesforce is adding ChatGPT to Slack, Musk said Twitter could be cash flow positive next quarter, and Lego sales were up huge in 2022.

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Let's dive in.

Before The Bell

Markets

• US stocks tumbled yesterday on comments from J Pow suggesting rates are ‘likely to be higher than previously anticipated'

  • Money market futures priced in a 70.5% chance of a 50 bps rate hike this month

  • Traders now expect a 5.6% fed funds rate to peak in October

• The pan-European Stoxx 600 shed 0.8%

• Global stocks also fell, with the MSCI world index losing 1.46%

• Canada's TSX dropped 1.2% on weakness in energy stocks

• US 2Y yield topped 5% for the first time since 2007

• 2Y-10Y yield curve inversion crossed -1% for first time since 1981

• Oil fell 3% on US rate hike expectations

• Dollar index surged 1.2% to its highest since early December

  • Euro and pound dropped 1.2% and 1.6% respectively

  • Mexico’s peso hit a five-year high on high rates and US benefits

Earnings

• Dick's Sporting Goods beat Q4 EPS and sales estimates on a 5.3% increase in same store sales on resilient demand despite inflation and industry-wide inventory struggles, while forecasting better-than-expected FY sales; their stock rose 11% (CNBC)

• Dole beat Q4 EPS and revenue estimates on higher prices across the board and strong growth in its fresh fruit segment (MS)

• What we're watching this week:

  • Today: Oracle, JD.com, Ulta Beauty

• Full calendar here

Headline Roundup

• J Pow said rates are ‘likely to be higher than previously anticipated' and is ready to revert to bigger rate hikes (FT)

• Yield curve inversion hit -1% for first time since 1981 (FT)

• Australia's central bank raised rated by 50 bps to 3.6% (WSJ)

• US stock sales hit ~$5B last week as investors cash out on recent rally (RT)

• US manufacturing growth is now outpacing the world in historic first (AX)

• Europe bond sales topped €500B in 2023 at fastest YTD pace ever (BBG)

• BlackRock sees 'reasonable chance' of Fed raising rates to 6% (RT)

• BofA CEO sees a US technical recession in Q3 (RT)

• Yellen warned climate change could trigger asset value losses (RT)

• Used vehicle prices are rising at fastest rate since 2009 (CNBC)

• China warned of path to 'confrontation and conflict' with US (AX)

• Salesforce will add ChatGPT to Slack (RT)

• Musk says Twitter could be cash flow-positive next quarter (RT)

• Starbucks CEO agrees to testify in Senate after subpoena threat (CNBC)

• Meta plans to cut thousands of jobs as soon as this week in second layoff round (BBG)

• FTC asked for Musk’s internal communications and journalist names with records access as part of Twitter investigation (WSJ)

• Atlassian will cut 5% of its workforce (BBG)

• Lego sales leaped 17% in 2022 (CNBC)

• Australia's sovereign wealth fund is screening for Chinese firms at risk of US bans (RT)

• Americanas' crash has halted several Brazil corporate bond sales (BBG)

• Victoria’s Secret Fashion Show will return after 4-year hiatus (HR)

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Deal Flow

M&A / Investments

• German railroad operator Deutsche Bahn selected Goldman Sachs and Morgan Stanley to advise on the potential sale of its logistics unit DB Schenker which could be valued at up to $21.3B (BBG)

• Financial marketplace operator Intercontinental Exchange reduced its valuation of mortgage data vendor Black Knight to $11.7B and agreed to sell one of Black Knight's units to address FTC concerns (RT)

• PE firm BPEA EQT plans to merge Tricor and Vistra, two business services firms it owns, in a ~$6.5B deal (BBG)

• The DOJ sued to block JetBlue Airways’ $3.8B purchase of Spirit Airlines (BBG)

• Crypto exchange Binance.US received US regulatory approval to buy bankrupt crypto lender Voyager Digital’s assets and transfer its customers in a $1.3B deal (RT)

• TPG Global made a $1.22B non-binding takeover offer for Australian funeral services provider InvoCare (BBG)

• South Korean internet giant Kakao offered to buy an up to 35% stake in K-pop label SM Entertainment in a potential $960M deal (BBG)

• Coupons.com parent Quotient Technology is exploring options including a sale; it has a current market value of ~$320M (RT)

• Sino Biopharmaceutical's invoX Pharma unit won approval from the Committee on Foreign Investment in the US to proceed with its $161M purchase of biotech F-Star Therapeutics (BBG)

• Health and wellness company Healing Co. agree to buy health and spirituality personality Dr. Deepak Chopra’s wellbeing experiences business, Chopra Global, in a ~$20M deal (BBG)

• Diet company WW International, known as Weight Watchers, agreed to buy digital health company Sequence, marking the company’s move into the market for diabetes and obesity drugs including Ozempic and Wegovy (WSJ)

• London’s Restaurant Group, the owner of the Wagamama restaurant chain, is being targeted by activist investor Irenic Capital Management while activist Oasis Management is already pushing the company for changes (BBG)

• Lyn Goleby, the founder of entertainment company Picturehouse, held talks with Cineworld bidder Vue International about buying back Picturehouse which was sold to Cineworld in 2012 (RT)

• Sports and entertainment company Endeavor invested in Twitter as the first outside investor since Musk's takeover (AX)

• Germany cleared Red Bull's purchase of drinks company Brandenburger Urstromquelle (RT)

VC

• Amelia, a startup enhancing call centers, customer service, and user experiences with conversational AI, raised a $175M round from BuildGroup and Monroe Capital (FN)

• Multi-location brand marketing platform SOCi raised $120M in funding led by MI Equity (FN)

• Noema Pharma, a clinical-stage biotech company focused on CNS disorders, raised a $112M Series B led by Sofinnova Partners (BW)

• Rapport Therapeutics, a clinical-stage biotechnology startup focused on the discovery and development of precision medicines for neurological disorders, raised a $100M Series A from Third Rock Ventures, ARCH Venture Partners, and Johnson & Johnson Innovation (BW)

• Threecolts, a startup building software for brands and retailers to manage their Amazon sales channel, raised $90M in Series A, pre-Series A, and debt funding from Crossbeam Venture Partners, General Global Capital, Stratos, and CoVenture (TC)

• LENZ Therapeutics, a biopharmaceutical company focused on presbyopia treatments, raised an $83.5M Series B led by Sectoral Asset Management (BW)

• Volastra Therapeutics, a clinical-stage cancer biotech startup focused on exploiting chromosomal instability, raised a $60M Series A led by Polaris Partners and ARCH Venture Partners (BW)

• Game studio Believer raised a $55M round led by Lightspeed Venture Partners (TC)

• 3D printing and nanotech startup Zeda raised a hybrid $52M Series B led by Michelin, Taiyo Nippon Sanso Corporation, and Fives Group (FN)

• Plus One Robotics, a startup providing parcel robotics vision systems, raised a $50M Series C led by Scale Venture Partners (TC)

• Assured Allies, a Boston-based insurtech startup, raised a $42.5M Series B led by FinTLV Ventures and Harel Insurance (FN)

• Fynn, a platform providing financing for vocational students, raised $36M: an $11M seed round led by Y Combinator and a $25M debt facility (TC)

• Banyan Infrastructure, a provider of a sustainable financing software, raised a $25M Series B led by Energize Ventures (FN)

• Kresus, a web3 app that lets users create, manage, and store digital assets, raised a $25M Series A led by Liberty City Ventures, JetBlue Ventures, Franklin Templeton, and others (FN)

• Organ transplant startup Paragonix Technologies raised a $24M Series B led by Signet Healthcare Partners (FN)

• Droit, a regulatory compliance platform used by banks such as Wells Fargo, Goldman Sachs, and UBS, raised a $23M Series B led by Pivot Investment Partners (TC)

• Student debt and savings optimization platform Candidly raised a $20.5M Series B led by Altos Ventures (FN)

• Miami-based hospitality startup Roami raised a $14M Series A led by Vigo Capital (FN)

• HR tech startup Tilt raised a $10M round led by Origin Ventures (PRN)

• Skill intelligence platform Glider AI raised a $10M Series A from Primera Capital and other industry leaders (PRN)

• Unitary, a London-based startup building contextual AI to automate content moderation, raised $8M in funding led by Plural and strategic angels (FN)

• Growfin, a finance CRM platform helping B2B companies optimize working capital, raised a $7.5M Series A led by SWC Global (FN)

• Evove, a startup building tech to separate liquids, raised a $6.7M round led by At One Ventures and AM Ventures (FN)

• Wave Life, a mental health app aimed at gen Z, raised a $6M seed round led by Sante Ventures (PRN)

• Non-custodial bitcoin platform Relai raised a $4.5M round led by ego death capital (FN)

• Shifted Energy, a distributed energy resources platform, raised a $4.3M seed round led by EPIC Ventures and Kapor (FN)

• Subscription-based climate media company Heatmap raised a $4M Series A at an $11.5M valuation led by Autumn Road Capital (AX)

• Solana-centric NFT trading platform Tensor raised a $3M seed round led by Placeholder (TC)

• itselectric, a curbside EV charging startup, raised a $2.2M pre-seed round led by Brooklyn Bridge Ventures (PRN)

• Smart vending machine startup Daily Blends raised a $2M seed round led by Hustle Fund and 2048 Ventures (FN)

• Health insurance verification platform Opkit raised a $1M round led by Global Founders Capital, Mischief, Y Combinator and others (FN)

IPO / Direct Listings / Issuances / Block Trades

• A consortium of Blackstone and Reuters News publisher Thomson Reuters launched a sale of a $2B stake in the London Stock Exchange Group (RT)

• Indonesia's Harita Nickel plans to raise over $600M in a local IPO (FT)

• Australian online auto classifieds firm Carsales.com will launch a ~$329M equity raise to fund a deal to buy an additional 40% stake in Brazil-based automotive digital marketplace Webmotors (RT)

SPAC

• Drone company AIRO agreed to merge with Kernel Group Holdings in an $847M deal (AIN)

Debt

• The largest-ever LBO financing arranged by private credit firms would allow healthcare technology company Cotiviti to PIK ~50% of the interest on a $5.5B loan; Veritas Capital and Carlyle Group are the sponsors in the transactions and the private credit cohort is composed of Apollo, Blackstone, HPS Investment Partners, and Oak Hill Advisors (BBG)

• Goldman Sachs is lining up $2.7B of debt financing for Advent International's potential $4.2B sale of French biometrics and identity verification firm Idemia (BBG)

• Indian conglomerate Adani Group prepaid $901M in share-backed financing, while securing a $3B loan from a sovereign wealth fund last week (RT)

• EV maker Rivian Automotive plans to raise $1.3B via a sale of convertible notes (CNBC)

Fundraising

• PE firm Riverside raised $1.87B for its Riverside Micro-Cap Fund VI (CCB)

• Salesforce Ventures launched a $250M generative AI fund (TC)

• Germany-based Matterwave Ventures raised $79M for a new $137M fund to back European industrial deep tech startups (SFT)

Crypto Corner

• Binance tried to hire now-SEC chair Gary Gensler in 2018 for closer ties with US regulators (CT)

• Voyager bankruptcy judge won't let SEC fine execs/advisers for creating a new cryptocurrency to help repay customers (BBG)

• J pow believes crypto sectors is a mess, but doesn't want to strangle innovation (CD)

• Demand for blockchain developers is soaring, but not just for crypto (DC)

• Thailand offered tax breaks for companies issuing investment tokens (RT)

• Brazil started a digital currency pilot project (RT)

Exec's Picks

• How to Invest is a master class on investing featuring conversations with the biggest names in finance, from the legendary cofounder of The Carlyle Group, David M. Rubenstein. Check out his latest book here.

• Noah Smith published a fantastic interview with editor, author, and futurist Kevin Kelly in his newsletter.

• "The most dangerous story that's ever been told is that happiness lies just beyond achievement." Jack Raines wrote a great piece on the relationship between success and satisfaction.

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