Good Morning! Bank and asset manager stocks had a rough Friday as credit concerns rattled markets. Western Alliance sued Jefferies over a soured loan tied to the First Brands collapse. And United Airlines updated its rules to permanently ban passengers who refuse to wear headphones.

The U.S. hasn’t been the place to be for investors so far in 2026, with the S&P 500 lagging behind emerging market stocks. Prediction market platforms Kalshi and Polymarket are each nearing roughly $20 billion valuations. And KKR-backed Axel Springer bought the UK’s Telegraph for $770 million and is planning a U.S. expansion.

Plus: Netflix buys Ben Affleck’s AI startup, and how your perception of sleep can make you feel more tired.

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SQUEEZ OF THE DAY

BlackRock’s Credit Gate

Eight months after spending $12 billion to acquire HPS Investment Partners, BlackRock has gated the firm's flagship private credit fund.

The $26 billion HPS Corporate Lending Fund received redemption requests equal to 9.3% of net assets last quarter, the first time requests ever breached the cap. BlackRock paid out $620 million of the $1.2 billion sought, invoking the 5% quarterly limit and queuing the rest. Technically within the rules, but a gate in practice.

The timing was brutal. Blue Owl had already ended quarterly redemptions at OBDC II, replacing them with a wind-down structure. And following the bankruptcies of First Brands and Tricolor last year (the latter's executives charged with a seven-year fraud) markdowns began appearing across private credit portfolios industry-wide.

Markets responded sharply. BlackRock shares fell 7.2%, hitting their lowest level since May. KKR, Ares, Blue Owl, Apollo, and Carlyle all dropped between 5% and 6%.

And broader backdrop regarding private credit across Wall Street hasn’t helped. Jamie Dimon has repeatedly flagged deteriorating underwriting standards.

At Bloomberg Invest on Tuesday, Apollo's Marc Rowan warned of a coming "shakeout" separating good underwriters from the rest. On Wednesday, HPS CEO Scott Kapnick took the same stage, acknowledged "pockets" of difficulty in smaller borrowers and software credits, and insisted scaled managers would be fine. Two days later, the redemptions hit.

The strategic problem runs deeper than one bad quarter. The HPS deal, done at roughly 30x projected 2025 fee-related earnings, was the cornerstone of Larry Fink's private markets push.

The thesis: use HPS to crack the wealth channel, bring retail into private credit, and eventually embed it into 401(k) portfolios. BlackRock's $60 billion fee-paying asset target from wealth alone depends on retail demand holding. Right now, retail is asking for its money back.

Takeaway: Private credit was sold to retail investors as a yield solution, with "limited liquidity" buried in the fine print. That worked when returns were strong and nobody needed cash. Now the cycle is turning, AI risk is bleeding into software loan portfolios, and the semi-liquid wrapper is being stress-tested for the first time. BlackRock didn't just buy HPS, it bet its next growth chapter on bringing retail into private markets. Friday was the first sign that bet may not pay out.

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HEADLINES

Top Reads

• Banks, asset manager stocks fall as credit concerns persist (BB)

• Western Alliance sues Jefferies over soured loan, records charge-off (WSJ)

• United Airlines can permanently ban passengers who don’t wear headphones (Verge)

• The U.S. is not the place to be for investors this year so far (CNBC)

• Kalshi and Polymarket are each eyeing roughly $20 billion valuations (WSJ)

• Axel Springer acquires the Telegraph (Axios)

• Netflix buys Ben Affleck’s AI startup (FC)

• What the extraordinary market volatility in Asia says about energy and AI (NYT)

• Vistry turned to private equity for discounted bulk sales (BB)

• Aperol maker bets more Americans will warm to Italian-style drinking (WSJ)

• 'E-shaped' economy is replacing a K-shaped one in 2026 (CNBC)

• Oil surges 35% this week for biggest gain dating back to 1983 (CNBC)

• U.S. payrolls fell by 92k in February; unemployment rate rises to 4.4% (CNBC)

• Users question Oura’s ties to DOD and consider cheaper smart rings (NYP)

• Samsung reveals first details of its AI smart glasses (CNBC)

• Why Wall Street is calling out ‘echoes’ of the 2008 financial crisis (CNN)

• US investors push for special funds to avoid Chinese tech (FT)

• European private credit borrowers don’t go bankrupt (FT)

CAPITAL PULSE

Markets Rundown

Market Update

• Equities were pressured as the Middle East conflict entered its seventh day and oil prices surged

• Energy and defensive sectors outperformed amid the risk-off tone

• U.S. dollar strengthened to a three-month high vs the euro as investors sought safe-haven assets

• Government bonds remained under pressure as higher oil prices pushed inflation expectations higher

• WTI crude recorded its largest weekly surge in more than two decades, rising ~35%

Economic Data Highlights

• Nonfarm payrolls unexpectedly fell by 92,000 in February

• Unemployment rate increased to 4.4%, partially reversing January’s strong report

• Job losses were broad-based across both private and government sectors

• Retail sales declined, largely attributed to severe winter weather

• The data complicate the Fed’s outlook as slower labor growth coincides with higher energy-driven inflation pressures

Geopolitical Developments

• Oil markets remain the focal point as supply disruption fears intensify

• Qatar warned Gulf producers may halt output within days if the conflict escalates

• The U.S. Treasury issued India a temporary license to increase purchases of Russian oil in an effort to ease supply pressure

• WTI crude is now at its highest level since late 2023

Market Implications

• The economic impact will depend on the duration of the conflict and extent of energy supply disruptions

• Asia and Europe are more exposed due to reliance on imported energy through Middle Eastern shipping routes

• Historically, oil spikes linked to geopolitical events have tended to be short-lived

• Oil would likely need to rise above $100 for an extended period to materially slow global growth

• The U.S. economy is less vulnerable to energy shocks, as the country has been a net oil exporter since 2019 and energy intensity has fallen significantly over time

Movers & Shakers

• (+) Samsara ($IOT) +19% after the telematics software company announced strong guidance.

• (+) Marvell Technologies ($MRVL) +18% because the chipmaker reported strong AI demand.

• (–) Jefferies Financial ($JEF) -14% after the firm got sued over Western Alliance.

Prediction Markets

• For the first time, retail traders can trade on AI infrastructure and compute.

• Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

• Six Flags sold seven of its amusement parks to EPR Properties for $331 million

• Science Corp., a brain implant startup, raised $230 million

• Nominal, an industrial software startup, raised $80 million 

• Sage, a care platform for senior living and skilled nursing, raised $65 million

• GenLogs, a freight intelligence platform, raised $60 million

• UForce, a defense technology company, raised $50 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

The Cure For Everything

Description: A sweeping exploration of how public health advances have transformed human life and what must happen next to sustain that progress. Williams and Marsa trace the battles against infectious disease, environmental threats, and social inequities that shaped modern health systems, while arguing that the future of health depends on prevention, community investment, and stronger public trust in science. The book blends history, policy, and global health insights to outline a bold vision for helping societies thrive.

Book Length: 416 pages
Release Date: February 3, 2026

Ideal For: Public health professionals, policymakers, healthcare leaders, and readers interested in how science, policy, and society intersect to shape population health.

The greatest improvements in human health come not only from medicine but from the systems and decisions that protect communities before illness begins.

DAILY VISUAL

California Dreamin’... About My Parents’ Place

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DAILY ACUMEN

Advice

Most advice tells you more about the person giving it than the problem being solved.

People advise from their own experiences, their own fears, and their own unfinished conclusions about how the world works.

That doesn't make advice useless. It just means you need to understand the lens before you trust the perspective.

The person who failed at risk will always counsel caution. The person who got lucky will always counsel boldness.

Take the input. Make your own decision.

ENLIGHTENMENT

Short Squeez Picks

• Am I rich?*

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• How to shift your emotions

• Why time freedom matters more than retiring early

• How your perception of sleep makes you tired

• Why leaders struggle with prioritization, not time management

MEME-A-PALOOZA

Memes of the Day

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