Good Morning,

US markets had a historic day as CPI showed deflation for the first time since Covid. Tech, mega caps, yields and the dollar all tumbled as investors re-positioned for an end to high rates…

Let’s dive in.

Before The Bell

As of 07/11/2024 market close.

Markets

US stock indexes swayed dramatically as investors swapped growth for value after inflation data all but guaranteed a path for Fed rate cuts
- Russell 2000 beat Nasdaq by the biggest one-day margin ever
- Russell 2000 hit its highest since March 2022 in its best day since November
- 'Mag 7' stocks tumbled 4.5% in their sharpest drop since October 2022
- S&P and Nasdaq broke seven-day win streaks in their worst day since April
Traders priced in a September rate cut and 40% chance of three by December
Europe's Stoxx 600 hit a one-month high, just inches away from its ATH
US 2Y to 10Y yields dropped to their lowest since mid-March
Pound surged to a one-year high versus the dollar
Yen surged 2.5% in its biggest jump since late-2022 on apparent BOJ intervention
Emerging market currencies jumped to their highest since May

Earnings

Delta missed Q2 revenue estimates and projected below-estimate Q3 sales as flight guts weigh on otherwise booming summer demand (CNBC)
PepsiCo beat Q2 EPS estimates but missed on revenue and gave a cautious FY outlook on weakened US consumer demand (CNBC)
What we're watching this week:
- Today: JPMorgan, Wells Fargo, Citigroup
Full calendar here

Headline Roundup

Citadel Securities crafts plan to shake up banks' S&T (BBG)
US June CPI showed deflation for first time since Covid (CNBC)
US deficit is down 9% YoY (RT)
UK economy returned to growth in May (CNBC)
UK announced its biggest stock market overhaul in three decades (FT)
Investors shun riskier junk bonds as bankruptcies jump (FT)
Portfolio managers expect worse credit conditions in Q3 (RT)
Goldman's risky financing engine is driving record revenues (RT)
Moody's warned private credit growth poses new risks (RT)
NFL will allow up to 10% PE ownership of teams (CNBC)
Hedge funds turn to South Korea for AI stock bets (RT)
Japanese stocks saw biggest weekly foreign inflows in six months (RT)
Citigroup's new head of banking will receive a $40M ESOP (FT)
PwC UK will reduce bonuses and pay raises after 'challenging' year (FT)
Central banks warned of 'unsustainable' sovereign debt levels (RT)
JPMorgan aims to amass 15% of US consumer deposits (RT)
Cathie Wood recognizes 'challenged' returns but insists on future profits (FT)
Tesla's share of US EV sales fell below 50% for first time (FT)
Trading houses are poaching top talent from energy giants (RT)
Ackman touts Berkshire as model for closed-end fund ahead of IPO (BBG)
Jefferies wound down 352 Capital in wake of lawsuit (BBG)
Lower earners made remarkable earnings progress in past year (AX)

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Deal Flow

M&A / Investments

Bain Capital will acquire wealth management SaaS firm Envestnet for $4.5B (WSJ)
PE firm Platinum Equity agreed to acquire Canadian aerospace manufacturer Héroux-Devtek for ~$1B, including debt (BBG)
SoftBank acquired struggling UK chipmaker Graphcore for ~$600M (FT)
German software provider SNP, which has a ~$390M market cap, is exploring a potential sale after receiving takeover interest (BBG)
Media conglomerate Axel Springer, KKR, and Canada's CPP and are in talks to split the business (FT)

Defense AI startup Helsing raised a $488M Series C led by General Catalyst (TC)
Regard, a health startup using AI to analyze patients' health data, raised a $61M Series B at a $350M valuation led by Oak HC/FT (TC)
Fireworks AI, a GenAI inference platform provider, raised a $52M Series B at a $552M valuation led by Sequoia Capital (FN)
Armada, an edge computing solutions, raised a $40M round led by M12 (BW)
Automated professional services startup HerculesAI raised a $26M Series B led by Streamlined Ventures (TC)
VC super-app HUI raised a $27.6M round from Nimbus Capital (PRN)
AI construction software startup Buildots raised a $15M round led by Intel Capital (TC)
IoT security startup Exein raised a $16.5M Series B led by 33N (TC)
AI-powered data quality platform Soda raised $14M from Singular and Point Nine (EU)
Contextual AI assistant startup Medal raised a $13M round at a $333M valuation from Horizons Ventures, OMERS, and more (TC)
Lemon.markets, a brokerage-as-a-service platform, raised a $12M round led by CommerzVentures, Heliad, and others (EU)
Dynelectro, a Danish green hydrogen startup, raised an $11M round from EIFO, Vsquared Ventures, and others (EU)
Sekai, a developer of consumer apps for anime fans, raised an $11M round led by Skycatcher (TC)
AI legal tech startup Alma raised a $5.1M seed round from NEA and more (TC)
Adfin, a UK fintech helping companies get invoices paid, raised a $4.9M seed round led by Index Ventures and Visionaries Club (TC)
Beeble AI, a virtual VFX solutions for filmmakers, raised a $4.8M seed round led by Set Ventures (TC)
Game development startup Iconic AI raised a $4M pre-seed round led by HodlCo (EU)

IPO / Direct Listings / Issuances / Block Trades

India's Reliance Industries may consider a spinoff of its telecom arm Jio as early as 2025 at a potential $112B valuation (TC)
Shanghai-listed drugmaker Biokin filed for a ~$500M Hong Kong IPO (BBG)
Game developer Shift Up’s shares jumped 18% in its trading debut after its $320M Korea IPO (BBG)
French media conglomerate Vivendi's Canal+ is exploring a spinoff in London (BBG)
Hong Kong-listed CK Infrastructure is considering an overseas listing (BBG)
Thailand’s largest music company GMM Music plans to IPO as early as this year (BBG)

Debt

JPMorgan will launch a $2.3B debt sale to fund printing company R.R. Donnelley's purchase of Vericast's print and digital marketing unit (BBG)
Blackstone will sell $2B in CMBS to fund its $10B acquisition of AIR Communities (BBG)
Reliance Industries' Reliance Ethane is seeking a $500M offshore loan to refinance debt (BBG)
CVC is preparing a loan for Ligue 1 football clubs in case they reject a multi-billion dollar broadcasting deal (BBG)

Bankruptcy / Restructuring

Redbox-owner Chicken Soup for the Soul Entertainment will liquidate under Chapter 7 (WSJ)
LA-based Elite Restaurant Group acquired struggling Mod Pizza, averting a bankruptcy (USA)

Fundraising

Flagship Pioneering, the biotech VC behind Moderna, raised $3.6B for its eighth fund and parallel funds (FT)
Manulife IM raised $810M for its second PE FOF (PRN)
Space VC Alpine Space Ventures closed its debut fund at $184M (TC)

Crypto Corner

Crypto HF SkyBridge Capital effectively barred clients from exiting (BBG)
Two ETF managers launched options on leveraged Bitcoin ETFs (RT)
Analysts need more info to gauge Block's crypto unit's earnings potential (RT)

Exec’s Picks

Amid Bill Hwang's fraud conviction, Reuters published a timeline of Archegos' spectacular $10B failure.

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