Good Morning and Happy Friday! Kohl’s CEO is out after allegedly funneling business to a romantic partner, and Elon Musk had a meltdown over reports that Tesla might replace him.

Not all Mag7 stocks are built the same. While Microsoft and Meta delivered blockbuster results, Apple and Amazon slipped after soft guidance, with shares down 3.2% and 3.8%. Reddit crushed earnings, Apollo raised $5.4B for a secondaries fund, and NYC lost $9B in income to Florida.

Plus: Private credit may be heading into choppier waters, New Yorkers will get their first-ever inflation refund checks, and 5 ways to handle toxic coworkers.

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SQUEEZ OF THE DAY

Private Equity Plays Defense

For years, defense assets were the untouchables of private equity: too regulated, too controversial, and too tricky to scale for EBITDA growth. But in 2025, the tide is turning and fast.

Thanks to a post-Ukraine military spending spree and Trump’s “America First” pressure campaign pushing Europe to step up its own defenses, defense is now one of the hottest asset classes on the continent.

Tikehau Capital is raising an €800 million aerospace and defense fund, backed by Airbus, Safran, and Thales. Bain Capital is eyeing UK defense contractor Chemring, while CVC and Weinberg Capital are also building out dedicated defense teams.

Regulatory roadblocks are also easing. ESG restrictions—once a major blocker—are getting quietly downgraded as LPs chase yield in an otherwise murky macro environment. The European Commission’s proposed €800 billion “Readiness 2030” initiative is further incentivizing private capital to enter the defense sector.

Even pension funds are getting in on the action: Dutch pensions are set to invest €100 billion in riskier assets, including defense.

Takeaway: In a year where most asset classes have felt like landmines, European defense has become private equity’s safe haven, predictable government contracts, a motivated buyer base, and zero risk of being outbid by tech bros. Call it tariff-proof… and maybe recession-proof too.

HEADLINES

Top Reads

• Kohl’s CEO fired for conflict of interest (Axios)

• Elon Musk melts down over Tesla might replace him (HR)

• Private equity firm buys Chef Boyardee for $600M (WSJ)

• Amazon projects profit that misses estimates on trade concerns (YF)

• Apple tops Q2 earnings estimates on strong iPhone sales (YF)

• Apollo raised $5.4B for a private equity secondaries fund (BB)

• NYC lost $9B of income to Miami, Palm Beach in 5 years (BB)

• HSBC Chair Mark Tucker to retire (YF)

• The U.S. economy may be even weaker than it appears (CNN)

• Airbnb issues disappointing revenue guidance for Q2 (CNBC)

• Replacing Elon Musk as Tesla CEO would pose a huge challenge (Axios)

• Reddit surges on 31% user growth (CNBC)

• Private credit heading for tougher times (WSJ)

• New Yorkers will receive their first-ever inflation refund checks in 2025 (Timeout)

• Berkshire outguns market as Buffett reaches 60 years in charge (YF)

• The EU is ‘making progress’ toward a $50B trade deal with the U.S. (CNN)

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CAPITAL PULSE

Markets Rundown

Market Update

• The Nasdaq led markets higher Thursday as strong earnings from Microsoft and Meta extended the tech rally. Health care and consumer staples underperformed.

• Apple, Amazon, and Airbnb reported after the bell, capping off a pivotal week for the Magnificent 7.

• The 10-year Treasury yield rose to 4.21%, reflecting improving sentiment on U.S. economic resilience.

• Oil prices climbed above $60 as the U.S. announced new sanctions on Iranian crude, boosting WTI futures.

• The U.S. dollar strengthened versus major currencies; Asian markets rose on a Bank of Japan rate hold, while European indices were flat.

• Manufacturing data was mixed: the S&P Manufacturing PMI held steady at 50.2 (expansion), while the ISM PMI dipped to 48.7, still beating expectations.

• Initial jobless claims rose to 241,000, slightly above forecasts, but still well below the long-term average. Continued claims edged up to 1.9 million, and April job cuts fell sharply to 105,000.

Economic Data Highlights

• S&P Manufacturing PMI (Apr): 50.2 – expansion, fourth straight month

• ISM Manufacturing PMI (Apr): 48.7 – mild contraction, better than expected

• Initial jobless claims: 241,000 – above forecast, but still historically low

• Continued claims: 1.9 million – slight increase from prior week

• April job cuts: 105,000 – sharp drop from 275,000 in March

• Oil: WTI rose above $60 – driven by Iran sanctions

• Fed outlook: Rate cuts possible by June or July if labor and growth weaken

Reported Earnings

• Apple (AAPL) – Reported May 1: Beat EPS at $1.65 and revenue at $95.4B; services revenue hit a record, but China softness and cautious outlook dragged shares down ~4%.

• Amazon (AMZN) – Reported May 1: Revenue rose 9% to $155.7B and EPS beat at $1.59; AWS growth slightly missed estimates, sending shares ~3% lower post-market.

• Airbnb (ABNB) – Reported May 1: Revenue up 6% YoY to $2.3B; earnings and bookings beat, but Q2 guidance came in light. Shares dropped ~3% after hours.

Earnings Today

• Exxon Mobil (XOM) – Reporting May 2 (Before Market Open): Focus on oil price sensitivity, buybacks, and earnings expected to decline ~15% YoY.

• Chevron (CVX) – Reporting May 2 (Before Market Open): EPS projected at $2.16; investors watching capital spend trends and the pending Hess deal.

• Cisco Systems (CSCO) – Reporting May 2 (After Market Close): Expected to report EPS of $0.92 on $13.5B in revenue; AI and enterprise IT demand in focus.

Movers & Shakers

• (+) Microsoft ($MSFT) +8% after posting an earnings beat.

• (+) Meta ($META) +4% because of strong ad sales; a plan to navigate tariffs.

• (–) Eli Lilly ($LLY) -12% after the drug maker cut its profit outlook.

Private Dealmaking

• Novartis bought Regulus, a kidney disease biotech, for $800 million

• Brynwood Partners acquired Chef Boyardee for $600 million

• True Anomaly, a national security software provider, raised $260 million

• Plenful, a workflow automation tools provider, raised $50 million

• Nuvo, a physical goods B2B network, raised $34 million

• Dub, a copy trading app, raised $30 million

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

BOOK OF THE DAY

How Countries Go Broke

Do big government debts threaten our collective well-being? Are there limits to debt growth? Can a big, important reserve currency country like the United States really go broke—and what would that look like?

For decades, politicians, policymakers, and investors have debated these questions, but the answers have eluded them.

In this groundbreaking book, Ray Dalio, one of the greatest investors of our time who anticipated the 2008 global financial crisis and the 2010–12 European debt crisis, shares for the first time his detailed explanation of what he calls the “Big Debt Cycle.”

Understanding this cycle is critical for helping policymakers, investors, and the general public grasp where we are and where we are headed with the debt issue.

Dalio’s model points toward surprisingly straightforward solutions for dealing with the debt problems that the US, Europe, Japan, and China face today.

How Countries Go Broke also shows how these debt problems are related to the other forces—political within countries, geopolitical between countries, natural (droughts, floods, and pandemics), and technological (most importantly, AI)—that together are causing what Dalio calls the “Overall Big Cycle” changes in the world order.

By reading this book, you will improve your understanding of what’s happening now and what to do about it.

“Ray Dalio’s market acumen is legendary, but it was creating and living by a set of principles that allowed him to reach the top.”

DAILY VISUAL

Gaming M&A Ticks Up

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DAILY ACUMEN

Legends Series: Ray Dalio

Ray Dalio doesn’t predict rain. He builds arks.

Founder of Bridgewater Associates, the world’s largest hedge fund, Dalio pioneered the “All Weather” portfolio—an asset mix designed to thrive in any economic environment: inflation, deflation, growth, or recession. It’s returned 12% annually since 1991 with minimal volatility.

Dalio views the economy as a machine—driven by debt cycles, productivity, interest rates, and psychology. This framework helped him navigate the 2008 crisis early, when many were blindsided.

Today, the data feels muddled. Q1 GDP has slowed to 0.8%. Bond yields sit at 4.2%. Fed cuts loom. Markets are up sharply off April lows, but uncertainty remains. Trade negotiations could ease or escalate. Inflation may linger or vanish. No one knows.

That’s where Dalio’s brilliance comes in. Don’t try to predict one future—prepare for all of them.

His message to investors in 2025? Don’t bet the farm on one scenario. Diversify across economic conditions. Build resilience into your portfolio. And when volatility strikes, your preparation—not your prediction—will be your advantage.

ENLIGHTENMENT

Short Squeez Picks

• Upgrade your morning investing insights with Opening Bell Daily

• 5 ways to deal with negative people at work

• How to boost motivation to exercise

• How to explain why you left your last job

• What chess and drug dealers can teach you about manipulation

• How to find joy and stay resilient when world feels heavy

MEME-A-PALOOZA

Memes of the Day

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