The Week Ahead Of Us 🔍 |
Welcome back! |
Surprisingly hot job numbers make a Fed rate hike within the realm of possibility (Polymarket odds of a 2026 hike are at 49%). Job gains came from leisure and hospitality, local government, and healthcare. This ties into the themes we’ve been seeing the past couple of years where yes, job growth is “fine”, but if it’s coming at the government and healthcare level rather than corporations, then how healthy is it really? The jump in leisure and hospitality is solid seasonal strength, but some economists believe this is partially driven by hiring in advance of The World Cup in the U.S. |
We had an ugly Friday, with chipmakers and AI names trading off hard. The Broadcom numbers, plus the move higher in rates led to a rapidly violent selloff. It’s a good reminder that what dramatically goes up, can come back down at the same velocity. |
We’ve passed 100 days of the U.S. Iran war and need to start showing that the ceasefire can become permanent. Iran reportedly launched missiles at Israel on Sunday, with Trump saying those missile attacks were “certainly not going to help negotiations.” Futures have recovered a bit over the past hour despite the launches due to President Trump saying Israel has “no choice” but to accept a US deal with Iran. Even crypto is bouncing back from the lows. It seems like the U.S. is working hard towards a deal, but the market may not have much more patience if a definitive resolution isn’t hammered out. We believe more inflation might resurface through the supply chain if this doesn’t get resolved soon, and voters angry about gas prices will vote as such in the Midterms. |
This is a massive week, with SpaceX set to start trading on Friday. Let’s get into it. |
Here’s a look at earnings this week. |
Monday: Campbell's, Vail Resorts Tuesday: Caseys General Stores, J.M. Smucker, United Natural, Cracker Barrel, Lands' End, Designer Brands, BARK Wednesday: Oracle, Chewy, Stitch Fix, Oxford Industries Thursday: Adobe, Lennar, Lovesac
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Here’s a look at economic data this week (estimates are in quotations). |
Tuesday: NFIB optimism index (96.1), U.S. trade balance (-$56.0B), Existing home sales (4.05M), Wholesale inventories (0.5%) Wednesday: Consumer price index (0.5%), CPI y/y (4.2%), Core CPI (0.3%), Core CPI y/y (2.9%), Monthly U.S. federal budget (-$277B) Thursday: Initial jobless claims (220,000), Producer price index (0.6%), Core PPI (0.4%), PPI y/y, Core PPI y/y Friday: Consumer sentiment prelim June
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On The Move 📈 📉 |
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IPO Roundup 📍 |
Sinda Ltd. filed for a US IPO to fund silver mining in Mexico’s Guanajuato state, where it holds rights across five contiguous concessions estimated to hold 369M silver equivalent ounces in inferred resources. Sinda is backed by Electrum Group, the same firm behind Sunshine Silver’s $270M IPO this past week. Morgan Stanley, Bank of Nova Scotia, and Bank of Montreal are leading the offering. SpaceX heads into its June 12 debut at a $1.8T valuation knowing it may not join the S&P 500 until 2028, after the index committee declined to relax its profitability rule. Anthropic and OpenAI are likely facing the same delay when they go public later this year.
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Today’s Headlines 📖🍿 |
OpenAI plans “superapp” pivot ahead of IPO: ChatGPT will be redesigned into a comprehensive superapp in the coming weeks, adding coding tools, image generation, and partner apps from Canva and Booking.com to compete with Anthropic. OpenAI has sidelined other consumer projects, including a video-generation product, to focus on the rollout. Goldman Sachs no longer expects a Fed rate cut this year: The bank pushed back its forecast of two cuts to June and December 2027 from December 2026 and March 2027, citing the stronger-than-expected labor market. Chief US economist David Mericle raised the probability of modest hikes to 20% from 10%, though he still sees them as unlikely. Meta weighs stock offering to fund AI push: The company is reportedly considering raising tens of billions in an equity sale after Alphabet said this week it plans to raise $85B. Meta currently has an FY26 capex guide of a whopping $145B. Retail brokerages set “flipping” rules ahead of SpaceX IPO: This is an important read for anyone buying the SpaceX IPO this week. Robinhood will block future IPO access for 60 days if shares are sold within 30 days, Fidelity will ban flippers for 6 months on the first offense and permanently on the third, Schwab will restrict flaggers for around 6 months on the first offense, and Sofi will block for 180 days plus charge a $50 fee for sales before day 120. Finally, E*Trade will flag and restrict flippers for a set period, with specific terms varying by the offering. SpaceX locks in a $30B Google compute deal: For $920M/month, Google gains access to 110,000 Nvidia chips to meet surging Gemini Enterprise demand, while SpaceX is positioning xAI’s Memphis supercomputer as a revenue-generating infrastructure business. SpaceX also has Anthropic paying $1.25B/month for the same service. Apollo and Blackstone finalize $35B Anthropic chip financing: The deal priced in three tranches, with $6B and $24B of Broadcom-backed senior notes at lower rates, plus $4.5B of unbacked notes at 8.5%. The capital will fund Google-developed TPU chips for Anthropic to lease, with roughly half of the debt syndicated to outside investors. Bitcoin $BTC ( ▲ 3.61% ) drops 16% on the week to October 2024 lows: Strategy’s bitcoin selling triggered a liquidation cascade, while a strong jobs report pushed yields higher and pressured risk assets. Bitcoin ETFs snapped a record 13-day outflow streak, but net assets have fallen from $107.8B to $80.4B since mid-May. Warren Equity Partners is expected to soon close on a $2.8B buyout fund for midmarket industrial services businesses. This is their fifth fund and fundraising is expected to finish this month. Pimco’s Ivascyn warns of sustained credit default cycle: Spreads near record tights are masking stress beneath the surface, with 2021-2022 LBO vintages financed at cheap rates the most vulnerable. Ivascyn also flagged AI infrastructure as a particularly uncertain sector. Bloomberg models an AI bubble burst costing $1.6T in global GDP: A 20% S&P 500 drawdown triggered by AI confidence would push US growth to near-zero in 2027, with Taiwan and South Korea hit hardest at -4% and -2% GDP, respectively. The Fed cuts 3-4 times in this scenario, with the response similar to the 2000 bubble pop. AI is disrupting wealth management: Tools like Claude are automating research, portfolio analysis, and client emails, freeing up advisors rather than replacing them. However, generational threats loom, as millennials inheriting $46T over the next 25 years say they’d prefer ChatGPT over a human advisor. DoubleLine and Oaktree are positioning for an AI credit bust: Hyperscalers have already sold $155B in unsecured bonds this year, up 45% from all of last year, with $5T in AI capex debt expected over five years. DoubleLine’s Cohen put the probability of an AI bubble at 100%, while OakTree and Pimco are selectively buying credits with balance sheets strong enough to survive a deep cycle. Radio sector rushes to clean up balance sheets ahead of potential deregulation wave: FCC Chairman Carr is pushing to lift local ownership caps that currently limit operators to eight stations per market, which would enable duopoly consolidation and transform competitors into synergistic merger targets. Teen unemployment climbs heading into summer: The BLS put unemployment for ages 16-19 at 14.7% in May, above the 14.4% April reading and 13.7% in March. Challenger, Gray & Christmas predicts summer teen jobs will fall to the lowest pace on record, with inflation, oil prices, AI and automation, and older workers staying in the workforce all impacting hiring.
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M&A Transactions💭 |
Vantage Risk, provider of specialty insurance and reinsurance services, was acquired for $2.1B by Howard Hughes. EV/Revenue was 375.0x. J.P. Morgan advised on the sale. |
Mercuria Energy Trading entered into a definitive agreement to acquire The Downstream Business Unit of Raizen for $1.42B. BTG Pactual advised on the sale. |
North Pacific Paper Company, manufacturer of paper packaging materials and publication paper products, was acquired for $360.0M by International Paper (NYS: IP). Moelis & Company advised on the sale. |
Knack RCM and EquializeRCM, providers of healthcare revenue cycle management services, were acquired by The Carlyle Group through an LBO. The acquisition is part of a multi-asset transaction that includes the two companies, Knack RCM and Mammoth EquializeRCM, with a collective round amount of $600.0M. |
ECHO Realty, operator of retail real estate properties, was acquired for $2.0B by TPG, PSP Investments, La Caisse, and Norges Bank Investment Management. Bank of America advised on the sale. |
Private Placement Transactions💭 |
Supabase, developer of an open-source backend platform, raised $500.0M of Series F venture funding led by GIC Private at a pre-money valuation of $9.5B. |
Gentle Monster, operator of an eyewear brand, raised EUR 107.0M of venture funding from Invites Ventures, Google Korea, and ZWC Partners at a pre-money valuation of EUR 2.57B. |
Flourish, developer of brain-inspired AI models, raised $500.0M of venture funding led by Jeffrey Bezos at a pre-money valuation of $2.0B. |
Apex, manufacturer of modular satellite platforms, raised $200.0M of venture funding led by Glade Brook Capital Partners and Washington Harbour at a pre-money valuation of $2.1B. |
Allen Control Systems, developer of autonomous systems, raised $200.0M of Series B venture funding led by Smash Capital at a pre-money valuation of $2.0B. |
Restructuring Updates💭 |
Trinseo PLC |
Type: Chapter 11 Debt: ~$3.4B liabilities against ~$2.3B assets. What happened: Following its May 26 filing, Trinseo's Chapter 11 case became the dominant new large-cap bankruptcy entering June, with restructuring proceedings, DIP financing, and creditor negotiations now underway. Scale signal: Global chemicals manufacturer with multi-billion-dollar balance sheet exposure across plastics, latex binders, and engineered materials.
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Home Value Store |
Type: Chapter 11 Debt: Assets estimated between $1M–$10M; liabilities between $500K–$1M. What happened: The Florida-based home improvement retailer filed Chapter 11 on June 2 amid housing-market weakness and competition from larger chains. Scale signal: Regional retailer with multiple locations and commercial delivery operations serving contractors and homeowners.
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Phoenix Pride |
Type: Chapter 11 Debt: Not disclosed. What happened: Phoenix Pride filed Chapter 11 while continuing operations, citing financial strain tied to declining corporate sponsorship support. Scale signal: One of the largest Pride organizations in the U.S., reflecting broader nonprofit funding stress.
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Restructuring Rumors💭 |
Brightline |
Type: Potential restructuring / Chapter 11 risk Debt: ~$5.5B. What happened: Creditors remain organized with restructuring advisers after the company issued a going-concern warning and entered bond-payment grace periods. Scale signal: One of the largest infrastructure and transportation distress situations currently active in North America.
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QVC Group |
Type: Chapter 11 restructuring conflict Debt: More than $5B of debt targeted for reduction. What happened: Confirmation hearings began in early June as disputes continue among stakeholder groups over plan treatment and value allocation. Scale signal: One of the largest retail/media restructurings of 2026 involving QVC, HSN, and Cornerstone brands.
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First Brands Group |
Type: Distressed Chapter 11 / liquidation risk Debt: More than $10B capital structure under restructuring pressure; administrative claims issues exceed $200M. What happened: The U.S. Trustee continues to seek conversion of the case to a trustee-led liquidation, arguing the company has no viable path to reorganization. Scale signal: Major North American automotive supplier serving both OEM and aftermarket channels.
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Odds of the Day 🍒 |
Polymarket traders are pricing in a 49% chance of a rate hike this year |
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