Public Markets 8-Hour Briefing
×Market Performance
The S&P 500 and Nasdaq fell sharply as AI spending fears returned, with the Nasdaq dropping 1.9% despite better-than-expected results from Nvidia. The tech-heavy index is now almost as cheap as consumer staples, raising questions about whether the sector's valuation trough has been reached. Treasury yields fell to their lowest level since November as stocks slumped, with the 10-year yield dropping amid the tech sector's decline.
Tech Sector Developments
Nvidia CEO Jensen Huang pushed back against the "Saa Spocalypse" narrative, arguing there's a "deep misunderstanding" about the software industry's future. Meanwhile, C3.ai announced it's slashing 26% of its staff as CEO admits failure to deliver and "burning too much money," deepening turnaround risks that led Citizens to downgrade the company. Salesforce eased AI fears with a strong outlook and announced big buybacks, while e Bay plans to cut 800 jobs in a strategic restructuring.
Major Deals & M&A
A bidding war erupted over Janus Henderson as Victory Capital made a cash-and-stock offer aimed at trumping an agreed deal led by Nelson Peltz's Trian Fund Management. Barnes & Noble owner Elliott Management is seeking London IPO pitches, inviting investment banks to pitch for roles on the initial public offering of the book retailers. Irenic Capital made an unsolicited bid for Reservoir Media, an independent music publisher whose catalog features Joni Mitchell and Sheryl Crow.
Economic & Policy
Federal Reserve Governor Stephen Miran said he thinks the Fed needs to cut interest rates by about a percentage point this year, while Vice Chair for Supervision Michelle Bowman said regulators are getting close to releasing a revised version of the bank capital proposal known as Basel III endgame. State Farm will pay a record $5 billion dividend to auto clients after posting strong underwriting profits. The US jobless claims rose slightly to 212,000, increasing by less than expected for the week that included the Presidents Day holiday.
International Markets
Colombia's peso posted its steepest drop since the pandemic in 2020 and the country's dollar bonds slid after a new poll showed leftist Senator Iván Cepeda with a wide lead in the presidential race. China's yuan touched its strongest level since 2023 as dollar weakness continued amid tariff uncertainty. Europe's biggest port warned it's increasingly exposed to geopolitical risks related to trade with China.
Private Markets & Credit
Blackstone launched a $400 million bond sale one day after its fund disclosed continued signs of stress in one of its largest investments, highlighting ongoing tremors in the private credit market. Carlyle Group CEO Harvey Schwartz suggested asset managers should have been more forthcoming about the relative illiquidity of investment funds sold to individual investors. Calpers CEO Marcie Frost said the largest US public pension isn't fazed about tremors in the private credit market driven by AI's potential threat to software.
Corporate News
Walmart agreed to a $100 million FTC settlement over driver pay after the agency alleged the big-box retailer deceived drivers about how much they could earn. Shake Shack reported higher fourth-quarter profit and said its sales growth and operational improvements allowed it to maintain margins amid industry headwinds. Papa John's is closing hundreds of pizza shops as the chain works to turn around its business while the broader sector struggles.
Energy & Commodities
BP is aggressively expanding shale drilling, bucking the conservative approach of many rivals as the UK oil giant seeks to reverse years of anemic output. Revere Copper Products, America's oldest copper manufacturer, is ramping up US investment as tariffs and surging demand from data centers lift earnings. Gulf petrostates are rushing to export crude amid fears of a US strike on Iran, with Saudi Arabia and the UAE boosting shipments as contingency plans are drawn up for potential disruption to oil flows.
Legal & Regulatory
Vanguard reached a settlement with Texas in a key case on ESG investing after Republican-led states accused the US's largest index fund managers of conspiring to reduce coal emissions. A court awarded record legal costs to My Forex Funds, a simulated trading firm whose assets had been frozen for more than two years, and said it was unimpressed with the conduct of the Canadian regulator. Swiss private bank MBaer faces the risk of losing access to the US financial system over alleged links to Iran and Russia.