"The more you learn about the art of investing, the more you see the importance of humility." — Bill Ackman
Good Morning! Boeing pulled its 2024 guidance, signaling to investors they’re prioritizing safety. Big Tech stocks are getting slammed despite raking in massive quarters. Jay Powell says it’s unlikely the Fed will start cutting rates in March. David Rubenstein of Carlyle bought his hometown Baltimore Orioles for $1.7 billion. And Novo Nordisk, the maker of Ozempic, became the second-ever European company to hit a $500 billion valuation.
In case you missed it, you can find our latest edition of Buysiders covering the Buzzfeed, Canva and Lionsgate deals here.
SQUEEZ OF THE DAY
Banking Across the Pond
Things haven’t been going great for Bank of America recently. The firm announced layoffs a few weeks ago, and some investment bankers reportedly received $0 bonuses.
But speaking at Davos, Brian Moynihan, the CEO of Bank of America, is talking about seizing opportunities in Europe. The bank’s plan? To expand their investment banking operations across the pond. And they're doing it as their rivals are taking a step back.
Bank of America especially sees an opportunity to cater to companies with annual revenues up to $2 billion aka the “middle market.”
Lesley White (a veteran with over 35 years at Bank of America) has been appointed to lead this international middle market strategy.
Middle market banking made the bank $1 billion in fees last quarter, surpassing analysts' expectations and maintaining the bank's market position despite overall market downturns.
Takeaway: It makes sense why some investment banks are hesitant to expand operations overseas right now. There’s a lot of geopolitical tension (US election, Ukraine, Israel, and US-China tensions) as well as market volatility - so many firms see 2024 as a time to play it safe. But Bank of America is taking a contrarian position and time will tell if the conservative or risky bet works out the best.
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Boeing pulls 2024 guidance to show investors that safety comes first (BB)
Europe is rushing to tighten AI oversight, the U.S. is taking its time (YF)
The average 401(k) balance by age (CNN)
Novo Nordisk becomes second-ever European company to reach $500 billion valuation (CNBC)
Why tech giants are getting slammed despite big quarters (YF)
The companies calling workers back to the office 5 days a week (WSJ)
Carlyle’s David Rubenstein bought the Baltimore Orioles for $1.7 billion (CNN)
Wall Street punishes Alphabet and Microsoft despite earnings beat (CNBC)
Walmart announces stock split to help workers buy shares (Axios)
Blackstone eyes repricing of deal banks won from private credit (BB)
Stocks closed lower because the Fed isn’t quite ready to cut rates.
(+) Plug Power ($PLUG) +19% after the hydrogen company got upgraded by Roth/MKM.
(+) Boeing ($BA) +5% after the airline beat on Q4 results, suspended financial guidance.
(–) Alphabet ($GOOG) -7% after missing expectations on Google ad revenue.
Cigna sold its Medicare Advantage business to Health Care Service Corp. for $3.3 billion
Zum, an electric school bus operator, raised $140 million
Inari, a gene editing startup for seeds, raised $103 million
Accompany Health, a health care services provider, raised $56 million
Bastille Network, a wireless threat intelligence, raised $44 million
Kitti, a design tool maker, raised $36 million
For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.
BOOK OF THE DAY
Most people think that to be wealthy, you have to be lucky enough to be born into the right family or work miserable, soul-crushing hours, sacrificing years of your life. Being lucky is not a strategy, and neither is destroying your life. Emmy Sobieski learned the secret strategies of the self-made mega-wealthy and outlines how to recognize opportunities, create your own luck, and build that kind of spectacular success in your own life.
One success strategy outshines the rest: leverage. Leverage gives you the power to use what you have to get what you want. Emmy spent years working in demanding, high-stress jobs and used leverage not only to manage billions of dollars on Wall Street, but also, simultaneously, to become ranked nationally in several competitive sports, including bodybuilding, equestrian, and track and field. Most importantly, she was happy while she did it all.
In $100M Careers, Emmy will teach you to reexamine your current career and future wealth-earning potential from a different angle and apply the strategies of the self-made mega-wealthy to build the future you deserve. Her book teaches you how to play by the rules of wealth, how to break those rules, and when.
Emmy also shows you how to find the on-ramps to high-leverage positions in any capital-driven career, how to find (and create) opportunities for yourself, and how to decide the next career track for your personality, all while remaining balanced and happy, doing something you love, and making a lot of money from it.
“Skip decades on your way to real wealth.”
Credit Market Outlook
Key themes for credit investors:
1) New issuance rallying sharply as demand remains strong from pension, annuity sales, and retail. Credit spreads continue to tighten and are trading near the tight end of the two-year range. Beta compression remains a key theme across credit, with the exception of CCCs.
2) Credit spreads are tight, but all-in yields are attractive with a Fed cutting outlook. Strong demand from yield buyers should limit the extent of any spread widening, barring a material worsening in the macro backdrop.
3) Uncertainty about the ongoing soft landing will keep volatility elevated. Hard landing or reacceleration in inflation are still possible scenarios.
4) Mid-beta credit such as BBB debt offers the attractive combination of wide spreads and stronger sponsorship from yield-driven demand. Financial conditions have eased recently but funding costs remain high, which combined with slowing growth could impact firms with weak balance sheets. Elevated cash balances on investment grade corporate balance sheets could drive a pick-up in M&A activity.
The idea of "manifesting" success through positive visualization has gained traction in self-help circles.
Advocates suggest that by vividly imagining desired outcomes and maintaining a positive mindset, individuals can attract success.
While positive visualization can impact one's mindset and motivation, critics caution against relying solely on this practice. Success typically requires a combination of positive thinking and concrete actions.
While fostering a positive mindset is beneficial, achieving goals often demands strategic planning and proactive efforts.
Positive visualization can be a valuable tool in personal development, but it should complement an action-oriented approach to goal achievement.
Short Squeez Picks
Memes of the Day