Good Morning! Musk became a trillionaire again after SpaceX climbed to its highest level since June after a Morgan Stanley upgrade. KKR agreed to buy Gen II Fund Services from Hg and General Atlantic for more than $5 billion.

Meta and Microsoft are reportedly cutting employees' Claude usage to reduce costs and push their own AI tools. Bondholders of Electronic Arts, which went private in the largest LBO of all time, are alleging a $1.4 billion debt default. And Wall Street's alpha-chasing biohackers are trading wine for wearables, with many execs wearing Whoops and Oura rings.

Plus: Private equity firms are doubling down on fossil fuels, and the 8 habits of great conversationalists.

Stuut is the AI coworker for order-to-cash, helping finance teams increase cash flow by an average of 40%, reduce DSO by 47%, and cut manual tasks by 70%. Learn more here.

SQUEEZ OF THE DAY

Citi Tries to Kill Two-And-Out

Citi is officially trying to kill the traditional “two-and-out” structure that has been a staple of investment banking programs across Wall Street for years. And instead of continuing to watch its best juniors leave for private equity after two years, Citi is giving them the chance to move up internally.

The bank is cutting its analyst program from three years to two, which will let juniors make associate a year earlier. Citi is trying to catch up with competitors and offer young bankers a faster path to more responsibility and higher pay. The expected path from analyst to VP will also shrink from six and a half years to five and a half.

And it all comes at a point where the war for junior talent is getting ridiculous. After PE recruiting kept getting earlier and earlier, investment banks started to fight back. Last year, JPMorgan told incoming analysts they could be fired for accepting another job before or during their first 18 months. Goldman started requiring new analysts to regularly attest that they hadn’t lined up another job, and Citi introduced disclosure requirements of its own.

But now Citi is trying to play the good cop and, rather than threatening its best analysts with the door, Citi is dangling an earlier promotion, more responsibility and a bigger paycheck.

Of course, analysts aren’t leaving investment banking because they’re impatient for a title. The career path for Wall Street’s rising stars has traditionally looked more like learning the deal-making ropes at a bank like Citi or Goldman before leaving for the investing side.

But private equity isn’t the slam-dunk exit it was a few years ago, and getting rich on carry looks a little less certain when funds are struggling to sell portfolio companies. Wall Street 360 analysis shows bankers now earn ~10% to 30% more in cash comp than PE professionals at every level below MD/Partner.

And Citi might be realizing that AI makes retaining early-level bankers even more important. As AI takes over more of the grunt work traditionally handed to analysts, AI-proficient associates and VPs could become dramatically more productive, especially if they know the bank’s systems, clients, and internal tools. Banks may ultimately need fewer analysts doing manual work and more experienced bankers who can use AI effectively and have the judgment to check its work.

Takeaway: Citi will never be able to out-carry the megafunds like KKR, and making associate a year early won’t stop the analysts who have been dreaming of the buy side since high school. But Wall Street’s response to PE poaching is getting more sophisticated. The banks started with the stick, but now Citi is adding the carrot: stay here and we’ll move you up faster. And between a weaker PE market and AI changing what banks need from their junior ranks, the traditional two-and-out model might finally have some real competition.

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HEADLINES

Top Reads

• McKesson and CD&R near $5bn-plus deal to buy infusion services provider (FT)

• PE losing appeal to banking as carry dries Up (W360)

• SpaceX stock climbs to highest since June, returning Musk to trillionaire status (CNBC)

• KKR agrees to buy Gen II Fund Services from Hg, General Atlantic for more than $5 billion (WSJ)

• Meta and Microsoft work to wean staff off Anthropic's Claude (The Information)

• Electronic Arts bondholders allege default following largest LBO (WSJ)

• Wall Street's alpha-chasing biohackers trade wine for wearables (BB)

• Private equity firms double down on fossil fuels (Oilprice)

• Robotics startup RobCo hits $1 billion valuation (WSJ)

• MIT endowment returns 10%, trailing large university peers (BB)

• Hedge fund giant Bridgewater emerges as advocate for 'little guy' in AI debate — pushes taxes to boost 'citizen equity' (NY Post)

• Cut spending to curb runaway borrowing costs, Goldman's Gutman tells governments (CNBC)

• Wall Street's AI party is on edge as soaring yields raise risks (BB)

• Trump Accounts' extraordinary expansion puts individual stocks into kids' holdings (WSJ)

• Tom Brady biography examines the price of his NFL greatness (BB)

CAPITAL PULSE

Markets Rundown

Market Update

• The S&P 500 gained 0.7% and the Nasdaq rose over 1%, with every sector higher except real estate.

• The 10-year Treasury yield finished around 5.31% and the 2-year slipped to 4.82%.

• WTI crude declined modestly to around $89.

Economic Data

• The ISM Services PMI held at 54.9 in September, comfortably above the 50 expansion threshold.

• Real household spending rose 0.6% in August and 2.6% from a year earlier.

• Nonfarm payrolls have averaged roughly 68,000 per month this year despite September's slowdown.

Fourth Quarter Seasonality

• Since 1990, the S&P 500 has averaged a 5% gain in the fourth quarter, with positive returns 83% of the time.

• In years with a 10%+ gain through September, Q4 averaged 6.4%, with gains in 13 of 14 years.

• The index is up more than 12% year to date through last Friday's close.

Movers & Shakers

• (+) Cerebras Systems ($CBRS) +9% after OpenAI CEO Sam Altman called the AI chipmaker a "close partner".

• (+) SpaceX ($SPCX) +7% because Morgan Stanley reiterated its Overweight rating and $300 price target.

• (–) Sphere Entertainment ($SPHR) -14% after Craig-Hallum downgraded the stock to Hold.

   

  Prediction Markets

• After a busy summer of launches (13 was the lowest month), September saw a noticeable decrease of only 8 launches.

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

Private Dealmaking

• Schneider Electric agreed to buy PTC, an industrial software maker, for $22.6 billion

• Shionogi agreed to buy IntraBio, a rare disease biotech, for $2 billion

• GE HealthCare agreed to buy Sofie Biosciences, a maker of cancer scan chemicals, for $945 million

• Valon Technologies, an OS for regulated finance, raised $150 million

• Quartermaster, a maritime intelligence startup, raised $100 million

• Blacksmith, an AI code-testing platform, raised $45 million

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

BOOK OF THE DAY

Humble Power

Description:
Ethan Willis makes the case that humility is not the opposite of ambition or leadership, but one of the most powerful ways to increase both. Drawing on research, real-world examples, and decades of coaching entrepreneurs and leaders, Willis argues that people who can set aside ego, acknowledge mistakes, seek honest feedback, and prioritize something larger than themselves ultimately become more effective and influential. He organizes the book around three dimensions: Humble Self, developing an accurate view of yourself and your purpose; Humble Relationships, building trust and psychological safety; and Humble Leadership, giving others the space and authority to perform at their best. The result is a practical framework for becoming a stronger leader without relying on status, control, or ego.

Book Length: 272 pages
Release Date: September 1, 2026

Ideal For:
Executives, entrepreneurs, managers, coaches, and anyone looking to become a more effective leader, build stronger relationships, develop high-performing teams, and increase their influence without becoming consumed by ego.

“Real power isn't about having the most control. It's about creating the conditions where everyone around you can become more powerful.”

DAILY VISUAL

Euro Falls to a 17-month Low

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The Most Interesting Room in Finance

Buysiders Club is a curated, highly vetted community of Wall Street's top minds, bringing together professionals across private equity, hedge funds, venture capital, investment banking, institutional investors, and operating executives.

What members get:

• Exclusive private dinners at places like John Lennon’s townhome, a SoHo art gallery, private clubs, etc.

• Access to private placement deals like xAI

• Partner events with brands like La Pauleé and the Enhanced Games

• Introductions to the global finance community and leaders from other industries, including arts, tech, culture, and fitness

If you want to level up your social circle and access the best people in finance and beyond, apply for membership below.

Apply for membership. (VP and above only)

DAILY ACUMEN

Which Price

Every return you quote has a hidden second half: the thing you measured it against. Bitcoin is about 83,500 dollars today, up 30 percent in six weeks. Measured in gold, it is about 20 ounces a coin, up from 14.5 in June.

The yardstick matters most when the two disagree. Last winter bitcoin fell from 126,000 to 60,000 dollars, roughly a 52 percent loss, while gold rose from 4,000 to 5,600. In ounces, a coin went from about 31 to about 11, a loss of about two thirds. The dollar chart showed a halving, and the gold chart showed something worse.

Before judging any position, name the denominator. Dollars tell you what you can spend today. Gold, a broad index, or the cash you would have held tells you what you gave up to own it. An asset that only wins when the currency is weakening is partly a bet on the yardstick, not on the asset.

ENLIGHTENMENT

Short Squeez Picks

• The 8 habits of great conversationalists

• Why skipping the Pumpkin spice latte won’t help you save for retirement

• When there's more work than your team can handle

• 7 books to help you cope with failure and move forward

• How to turn failure into progress

MEME-A-PALOOZA

Memes of the Day

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