October 18, 2026 | Read online

The Week Ahead - October 18th

Anthropic's IPO - You Have to Call it

The Week Ahead Of Us 🔍

Welcome back. While futures are up right now, unfortunately, the rates pressure we’ve been calling out has hit a breaking point. When rates skyrocket, cost of capital goes up, and CoreWeave and the neoclouds have been declared as the potential problem children of this cycle. High rates have resulted in a riskoff environment, but noise around Anthropic’s IPO is also double-whammying AI & bottleneck trades.

Additionally, Anthropic’s IPO candidly looks like a toss-up. There seems to be pushback over the $2T valuation, and the 3Q ARR number implies some August/Sept. decel vs. peak tokenmaxxing in July. Firmus had to scrap their IPO, and now Nscale is getting investor pushback on its valuation.

Plus, the two wars continued on this weekend, with Ukraine launching 1,000 drones at a St. Petersburg oil export terminal.

With inflationary oil-driven pressures working it's way through the economy, the Fed is still expected to hold rates in October, but December looks like a 25bps hike, and things might go higher from there. Let’s get into it.

Here’s a look at earnings this week.

Monday: Fifth Third Bancorp, Steel Dynamics, W.R. Berkley, Crown Holdings, Cleveland Cliffs
Tuesday: GE Aerospace, Netflix, General Motors, Capital One, RTX Corporation, 3M, United Airlines, Intuitive Surgical, Northrop Grumman, Chubb, Halliburton, Synchrony Financial,
Wednesday: Meta Platforms, Tesla, Lam, Thermo Fisher, SAP SE, Texas Instruments, International Business Machines, Abbott Laboratories, Moody's, AT&T, Philip Morris International, NextEra Energy, Abbott, Elevance Health, Southwest Airlines, CSX
Thursday: Procter & Gamble, Union Pacific, Lockheed Martin, Spotify, Blackstone, Western Digital, Comcast, Valero Energy, Newmont, Honeywell, Norfolk Southern, Barclays, Nasdaq, Bloom Energy, American Airlines
Friday: American Express, Eni, First Citizens BancShares, Autoliv, SLB Limited, Rogers Communication, Dr. Reddy's Laboratorie

Here’s a look at economic data this week (estimates are in quotations).

Monday: NAHB Housing Market Index (31)
Tuesday: Housing Starts (1.3M), Pending Home Sales Idx M/M% (-0.3%)
Wednesday: No events scheduled
Thursday: Weekly Jobless Claims (200K), Leading Indicators (-0.1%), Kansas City Fed Survey
Friday: US Flash Manufacturing PMI (55.3), US Flash Services PMI (58.1), U. Michigan Final Consumer Survey (46.3)

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Earnings Corner 💸

Taiwan Semiconductor $TSM ( ▼ 2.28% ) Revenue beat at $46.72B and EPS also beat estimates at $4.60. Results were driven by strong demand for its most advanced chips, as customers like Nvidia, AMD and Broadcom continue ramping AI infrastructure spending. Demand is still running ahead of available capacity, pushing the company to keep investing heavily in new fabs and advanced manufacturing. The company maintained its capex budget and expects spending through 2028 to rise further, while mgmt. guided Q4 revenue to $52.3B–$54.3B, above expectations, and raised FY26 revenue growth guidance.
Charles Schwab $SCHW ( ▼ 2.34% ) slightly missed on revenue but beat on adjusted EPS at $1.69. Results were driven by record $190.4B of core net new assets, a 44% jump in trading activity and higher interest income, but slower client cash growth increased reliance on more expensive funding and pressured margins. Mgmt. now expects FY26 revenue and expense growth toward the low ends of prior guidance.
Bank Of New York Mellon $BNY ( ▲ 0.85% ) Revenue and EPS beat. Results were driven by broad based growth in servicing and wealth businesses, higher market values, stronger client activity and 15% growth in net interest income as maturing securities were reinvested at higher yields. Assets under custody and administration reached $63.4T, and mgmt. raised its FY26 outlook to nearly 500 bps of positive operating leverage and 15% NII growth.
U.S. Bancorp $USB ( ▲ 2.34% ) Slightly missed on revenue at $7.97B vs. $7.99B but beat on adjusted EPS at $1.34. Results were driven by growth in net interest income from loan growth and asset repricing, while fee revenue rose on stronger payments, treasury management and capital markets activity, with the BTIG acquisition helping capital markets revenue jump 69% YoY. Average loans grew and credit quality improved, though higher expenses and provisions partially offset the gains.
Interactive Brokers $IBKR ( ▼ 3.88% ) Beat on revenue at $1.91B and slightly missed on EPS at $0.67. Results were driven by 30%+ growth in customer accounts, 18% higher trading activity and 47% growth in margin loans, which helped commissions rise and net interest income increase as customers borrowed and held more assets on the platform. Mgmt. also raised the quarterly dividend 71%, while continuing to expand overnight trading, crypto and AI-enabled trading products.
M&T Bank Corp $MTB ( ▼ 1.54% ) Beat on the top and bottom lines, with revenue of $2.55B and adjusted EPS of $5.08 vs. $4.98. Results were driven by solid commercial real estate and consumer loan growth, while stronger deposits reduced reliance on short-term funding. Higher deposit costs pressured margins, but credit remained stable. Mgmt. guided Q4 net interest income to $1.83B–$1.85B.
Citizens Financial $CFG ( ▼ 0.11% ) Slightly missed on revenue at $2.32B vs. $2.33B but beat on EPS at $1.41. Results were driven by growth in net interest income, helped by loan growth and a higher net interest margin, while credit quality improved as charge-offs declined. Higher funding costs remained a headwind, but mgmt. still raised the quarterly dividend to $0.52/share.
Truist Financial $TFC ( ▲ 1.07% ) Missed on both the top and bottom lines, with revenue of $5.19B. The miss was driven by securities losses and higher costs, which outweighed stronger net interest income, deposit growth and a record quarter in wealth management. Mgmt. is also selling $7.7B of unsecured consumer loans and guided Q4 revenue to roughly $5.35B.
Regions Financial $RF ( ▲ 0.51% ) Missed on revenue at $1.97B but beat on EPS. Revenue missed as net interest income came in slightly light and loan growth slowed, especially in consumer lending, but earnings were supported by a higher net interest margin, record capital markets and treasury management revenue, and lower charge offs. Mgmt. expects Q4 net interest income and net interest margin to rise.

On The Move 📈 📉

CoreWeave $CRWV ( ▼ 11.91% ) and Nebius $NBIS ( ▼ 12.18% ) each fell more than 25% this week as concerns over AI financing and circular deals hit the AI trade, though analysts were calling the selloff “just another scare.”
Energy stocks $COP ( ▲ 3.37% ) , $EOG ( ▲ 4.23% ) , $FANG ( ▲ 4.27% ) , and $EQT ( ▲ 3.53% ) rose after Brent crude topped $110 as the Iran war keeps the Strait of Hormuz closed.
Bending Spoons $BSP ( ▼ 15.6% ) pulled back after surging 41% earlier in the week on Berkshire Hathaway’s $330mm investment.
Crypto stocks $RIOT ( ▼ 11.48% ) , $CIFR ( ▼ 10.56% ) , $CLSK ( ▼ 10.16% ) , and $MSTR ( ▼ 9.56% ) sold off after MSCI tightened its index rules for companies holding large crypto reserves, putting Strategy at risk of removal in November.

IPO Roundup 📍

Anthropic IPO latest: Some Anthropic investors now see a $1.5T IPO, not $2T following the Company;s investor day last week.
- Anthropic got a BB+ credit rating from Kroll Bond Rating Agency in June, one notch below investment grade. Bankers are pushing the major rating agencies to give it IG status once it goes public.
- Anthropic is planning to commit 5% of its shares to a “public benefit fund” that would support programs addressing ai impact on workers.
- The company also opened talks with NYC Comptroller Mark Levine after he urged it to delay its IPO over AI safety concerns.
Microsoft pulled out of a UK data center deal with neocloud Nscale, a setback for its IPO hopes. Some investors are also urging Nscale to cut its valuation target to $16-19Bn from as much as $35Bn. Its flagship Norway site is six months behind schedule, and the company has built less than 1% of its targeted capacity so far.
City Therapeutics, an early-stage RNAi drug developer, jumped 24% in its Nasdaq debut after raising $200mm in an upsized IPO priced at $18.

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Today’s Headlines 📖🍿

US banks are blocking AI agents that try to move money for customers. Schwab CEO Rick Wurster says the firm is stopping unauthorized agents, including Meta’s Muse. JPMorgan CEO Jamie Dimon also said he won’t give outside agents free rein with customer account information.
J.P. Morgan says earnings will decide how long stocks can shrug off hot inflation and high yields. Consensus still calls for S&P 500 earnings to grow about 30% this quarter.
DeepSeek released V4.1-Flash-1017, an updated AI model it says is faster and leaner. The Chinese company says it delivers “substantial improvements across reasoning, coding, agentic tasks, and visual benchmarks.”
Ares says private credit has beaten public credit once cash flow timing is matched. Senior direct lending funds launched from 2015 to 2020 outperformed a leveraged loan ETF by a median 3.3% a year, an edge that narrows but generally holds after adjusting for leverage.
Poppi is underperforming expectations, cutting the earnout value as growth has fallen short. Investors are also losing patience with PepsiCo as it falls behind Coca-Cola. The stock is down about a third from its 2023 peak, and CEO Ramon Laguarta admitted “we’re not competing well in soft drinks.”
The proposed PWP-Piper Sandler merger collapsed after senior Perella bankers rejected retention packages as too low, with top producers offered $2.5M in combined-company shares to stay for up to three years.
Smaller private equity firms are under mounting pressure from higher borrowing costs and delayed exits, as fundraising totaled $222Bn through September versus $330Bn in all of 2025. New State Capital Partners has lost 1/3 of its staff over the past year, including two of its three founding partners.
Oaktree’s agreement to buy a controlling stake in A-Cap’s Atlantic Coast Life Insurance has collapsed after South Carolina regulators raised concerns over its exposure to defunct 777 Partners.
Partners Group is blocking hedge funds from buying the loans of portfolio companies Emeria, Ammega, and Breitling through approved lender lists as it works to refinance €6Bn ($6.7Bn) of debt due in 2028.
Pizza Hut is in early talks with ABS investors ahead of a possible whole-business securitization to finance LongRange Capital’s $1.5Bn buyout of its operations outside mainland China.
KKR-backed venture firm Catalio Capital Management is looking to raise $500M for its Nexus V fund to back AI healthcare startups after selling three portfolio companies for more than $8Bn this year.
Volta AI sold its $5Bn AI loan at 6.5 points over the benchmark and 95 cents on the dollar, pushing yields past the 11% initially expected and adding early-repayment penalties.
Hain Celestial is weighing a Chapter 11 filing as soon as next month after lenders missed the October 12 deadline to extend its December debt maturity.
Thoma Bravo-backed Proofpoint has locked in $1.25Bn of financing for its $6.3Bn cash acquisition of Varonis, with JPMorgan and UBS leading a later high-yield bond sale.
The AI industry is spending hundreds of millions of dollars to shape the 2026 midterms. Companies are split between pushing for strong federal rules and keeping regulation to a minimum.

M&A Transactions💭

Varonis (NAS: VRNS), a cybersecurity vendor focused on data privacy and security, entered into a definitive agreement to be acquired by Proofpoint, via its financial sponsors Alberta Investment Management, CPP Investments, Inflection Ventures and Thoma Bravo through an estimated $6.23B public-to-private LBO. EV/Revenue was 9.05x. Goldman Sachs advised on the sale.

Stockbridge Capital Group, operator of an independent real estate investment management firm based in San Francisco, Atlanta, and Chicago, reached a definitive agreement to be acquired by EQT for $550.0M. The company will receive a contingent payout of $175.0M subject to set performance targets relating to raising fee-paying commitments in new products, contributing to EQT's overall fee-paying assets under management.

NonStop Gym, operator of a chain of fitness clubs intended to provide high-quality training at affordable prices, entered into a definitive agreement to be acquired by PureGym, via its financial sponsors Leonard Green & Partners, Future Standard and Kohlberg Kravis Roberts through a GBP 235.0M LBO.

The Cycle & Carriage Automotive Distribution of Jardine Matheson Southeast Asia (SES: C07) was acquired by PT Chandra Asri Pacific (IDX: TPIA) for approximately SGD 265.0M.

Fiberon, manufacturer of wood composite decking and railing products intended for use in commercial construction, reached a definitive agreement to be acquired by Inteplast Group for $160.0M. Jefferies advised on the sale.

Energreen, manufacturer of robotic machines intended for green maintenance, was acquired by 21 Invest, Ambienta, and Mr. Daniele Fraron for an estimated EUR 300.0M. EV/EBITDA was 9.73x and EV/Revenue was 2.09x. Houlihan Lokey advised on the sale.

D.S. Brown, manufacturer, designer and supplier of engineered rubber, steel and concrete products to the bridge and highway industry, reached a definitive agreement to be acquired by Saint-Gobain for $208.0M. EV/Revenue was 2.31x. Moelis & Company advised on the sale.

Cygnus Metals, an exploration company focused on advancing the Pontax Lithium Project in the James Bay lithium district in Canada, was acquired by Central Asia Metals (LON: CAML) for approximately AUD 232.0M. EV/Cash Flow was 99.59x. Canaccord Genuity advised on the sale.

Gooch & Housego, provides photonics technologies and solutions for industrial, aerospace and defense, life sciences, and scientific research applications, was acquired by Arlington Capital Partners through a GBP 345.6M public-to-private LBO. Under the terms of the agreement, shareholders of the company will receive 1,230 pence in cash for each share they hold, plus a previously declared interim dividend of 4.9 pence per share, for a total value of 1,234.9 pence per share. Rothschild & Co advised on the sale.

Bruton (OSL: BRUT), a holding company focused on investing in the energy and transportation industries, reached a definitive agreement to be acquired by International Seaways (NYS: INSW) for $370.0M. EV/Cash Flow was 45.58x. Pareto Securities advised on the sale.

Private Placement Transactions💭

Xingyuan Zhike, developer of satellite communication terminals designed to enable mobile connectivity, raised over CNY 1.0B of Pre-A venture funding from Hillhouse Investment Group, CAS Star, and Beijing Industrial Investment.

OMass Therapeutics, developer of a structural mass spectrometry technology platform designed to help clients discover medicines, raised $310.0M of Series C venture funding in a deal led by Bain Capital Life Sciences, Forbion, and Novo Holdings.

Armadin, developer of a cybersecurity platform designed to detect and verify vulnerabilities automatically, raised $265.0M of Series B venture funding in a deal led by Accel and Andreessen Horowitz, putting the company's pre-money valuation at $2.29B.

Restructuring Updates💭

Character.AI — Type: Chapter 11. Debt: $50M–$100M in estimated liabilities. What happened: The AI chatbot company filed in Delaware, citing development costs, litigation and regulatory pressure. It plans a court-supervised sale by year-end, with more than $10.6M owed to its 20 largest unsecured creditors.

The Medical Group LLC — Type: Chapter 11. Debt: Not yet verified. What happened: The company and five affiliated debtors filed October 16 in North Dakota. The filing is confirmed, but the restructuring terms and total liabilities have not yet been established.

Museion Services LLC — Type: Chapter 11. Debt: Not yet verified. What happened: Filed October 14 in Texas with two affiliated debtors. Public reporting remains limited, and the financial scale of the case is unclear.

Restructuring Rumors💭

Getty Images — Type: Planned prepackaged Chapter 11 / take-private. Debt: ~$270M of unsecured notes targeted for retirement; $533M equity commitment. What happened: Announced October 12 restructuring agreement backed by Koch Equity Development, Getty family shareholders and major creditors. The transaction would take Getty private, reduce debt obligations and extend maturities. A Chapter 11 filing is expected by October 21.

Optimum Communications (Altice USA) — Type: Potential debt restructuring. Debt: ~$21B. What happened: Creditors and Patrick Drahi remain divided over ownership of the reorganized company. Drahi reportedly wants to retain approximately $3B in equity, versus the roughly $500M creditors are willing to offer.

TV Azteca — Type: Contested Chapter 15 restructuring. Debt: ~$644M in disputed bond principal and interest. What happened: Bondholders challenged recognition of the company's Mexican restructuring, alleging improper creditor voting and asset transfers designed to limit recoveries.

Noteworthy Chart 🧭

“Morgan Stanley has revised AMD's GPU demand forecast for 2026-2030 from 14.1 million units to 8.0 million units, or -43.3%, while keeping Nvidia's the same.” - P Equity Research