August 24th - The Week Ahead

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The Week Ahead Of Us 🔍

Welcome back!

Programming note - this is one of the slowest business weeks of the year - so we’re taking this Thursday off. We’ll be back at 8pm EST on Monday, September 1st.

Also - our Investment Banking Compensation Survey dropped a few days ago on Buyside Hub - make sure you’re a user so you can access the report.

Here’s a look at earnings this week.

• Monday: PDD, Heico

• Tuesday: BMO

• Wednesday: Nvidia, CrowdStrike, Snowflake, Kohl’s

• Thursday: TD Bank, Dell, Dollar General, Affirm, Ulta Beauty, Dick’s Sporting Goods, Burlington, Best Buy, WeBull, Petco, Victoria’s Secret

• Friday: Alibaba

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

• Monday: July new home sales (632k)

• Thursday: Jobless claims (230k), 2Q GDP (3.1%)

• Friday: July personal income (0.4%), July person spending (0.5%), July PCE (0.2%) July Core PCE (0.3%), Core PCE y/y (2.9%)

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Earnings Corner 📈 📉

Walmart $WMT ( ▼ 1.15% ) had a nice print with sales slightly topping forecasts and the FY outlook raised. Walmart’s low-price strategy has been paying dividends in a world where consumers are stretched. Higher-income consumers visiting Walmart because of tight wallets has been an ongoing theme. SSS was +4.6% (Est. of +4.2%) and FY26 revenue is expected to grow 3.75% to 4.75% (up from 3% to 4%). However, earnings was the disappointing side of the print and the stock took a hit as tariff uncertainty looms, with costs expected to start to hurt earnings in 3Q and 4Q.

BJ’s $BJ ( ▼ 8.53% ) slipped after SSS of -0.3% (Comparatively, Sam’s Club SSS was +5.9%) was a heavy miss relative to estimates of a +2.4% rise. While FY EPS guide was narrowed into $4.20 to $4.35, tariff uncertainty and a weak consumer is hitting them. The wholesale club said they will “hold prices as long as we can” amid the tariff backdrop.

Intuit $INTU ( ▼ 5.03% ) saw a big pullback despite a total beat due to 1Q revenue growth coming in slightly lower than expected, with Mailchimp in particular seeing a revenue slowdown.

Ross Stores $ROST ( ▲ 1.12% ) had solid numbers, with Revenue of $5.5B up 5% y/y and +2% SSS, but called out that consumers are turning to discount shopping and continuing to “trade down”. For 3Q and 4Q, they expect +2% to +3% SSS growth.

Workday $WDAY ( ▼ 2.77% ) posted 3Q subscription revenue in line with analyst expectations, and called out challenges in its government and education businesses. Outside of results, there’s worries that AI could eat into Workday’s business model and the slowing billings growth could be a sign of things to come. However, Workday acquired Paradox, an AI software for recruiting and is announcing the implementation of AI agents

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The Main Story 🔍

The Fed is opening the door for a rate cut: Jerome Powell gave a surprisingly dovish speech in Jackson Hole on Friday. Odds of a September cut are now at 76% (per Kalshi) following Powell’s comments that “the shifting balance of risks may warrant adjusting our policy stance.” While inflation concerns persist, he noted that the effects from tariffs are “now clearly visible” and that their impact may not cause an ongoing inflation problem, but rather a one-time shift in the price level. Still, he reiterated that the uncertainty around the timing and magnitude of tariff-driven price increases remains high. Powell also said that while the labor market appears to be in balance, both the supply and demand for workers has slowed, an unusual situation that suggests “downside risks to employment are rising”

Ultimately, Powell has a dual mandate - maximum employment and low inflation. It now looks like the Fed is going to prioritize the employment side of the equation as some rate cuts start flowing into the economy. Sadly, this likely means inflation is going to run above the ~2% target range, so let out a sigh and understand that 3%+ inflation is coming. Whatever you do, try to make at least 3% more than you did last year…

Today’s Headlines 🍿 

• U.S. takes 10% stake in Intel: Trump announced that the U.S. “now fully owns and controls 10% of Intel” after receiving 433.3mm shares of common stock priced at $20.47. The government will have no board representation. The investment was funded by yet-to-be-paid grants from the U.S. Chips and Science Act and the Secure Enclave program. The $2.2B in Chips Act money Intel has already received brings the total stake to $11.1B, or 9.9% of the company

• EU Trade Deal: The U.S. settled on a 15% blanket tariff on EU exports, marking a major win for Pharma, Auto, and Semiconductor companies that had been threatened with much higher rates. The deal also calls for eliminating trade barriers on U.S. industrial goods, $750B in purchases of U.S. energy, and an additional $600B investment into the U.S.

  • Meanwhile, Canada is still looking to secure a favorable trade deal for itself. The country removed many of its retaliatory tariffs on the U.S. in an attempt to spark further negotiations, although the 25% tariffs on U.S. autos, steel, and aluminum will remain for now

• Keurig Dr. Pepper is in talks to acquire European coffee maker JDE Peet’s for $18B. Following the transaction ,the company would separate its coffee and beverage units

• Meta doubles down on AI: Despite conflicting reports, Meta appears to be continuing to invest in AI, with a key hire poached from Apple. This comes as the Company has restructured its division into four specialized teams — including a secretive “TBD” lab focused on personal superintelligence — and plans to invest between $66-72B this year in AI infrastructure. This includes Meta paying Google Cloud $10B over 6 years to use Google Cloud servers

• Cracker Barrel’s image crisis: A rebranding — specifically removing “Uncle Herschel” from its logo — sent shares tumbling and triggered backlash, particularly from conservative groups. The stock lost nearly $100 million in market cap, its biggest drop in months, while analysts remain skeptical about sustained traffic recovery

• Spirit is exploring strategic alternatives: The budget airline has continued to struggle after emerging from bankruptcy earlier this year. A decline in domestic travel has put Spirit in a cash crunch, forcing the company to max out its revolver and putting it at risk of breaching minimum liquidity covenants by year-end. Fitch and Moody’s have both downgraded Spirit within the last two weeks to a respective CCC- and Caa3

• Paramount layoffs: The linear tv company is expected to lay off 2k-3k employees by early November; all part of the $2B cost savings plan that was signaled following the merger with Skydance Media

• Furniture Tariffs are on the way: Trump has launched an investigation into furniture imports, which will conclude within 50 days and result in a tariff. Shares of import-heavy companies like Wayfair, RH, and Williams-Sonoma dropped after hours, while La-Z-Boy - which manufactures mainly in the U.S. - saw shares rise on the news

• Trump vs. Cook heats up: President Trump has publicly vowed to fire Fed Governor Lisa Cook over alleged mortgage fraud — claims she disputes and calls political bullying. Cook, serving through 2038, has refused to step down, and experts note legal barriers to her removal absent “for cause” justification

• FanDuel bets on financial events: FanDuel is partnering with CME Group to offer event-based prediction markets covering macroeconomic indicators and commodities. Rather than directly focusing on sports, the platform will enable yes/no contracts on things like GDP, CPI, and S&P 500 moves

• Europe’s football frenzy fuels lending boom: Clubs spending over €5B on summer transfers have ignited demand in private credit, using player fees as collateral. Large names like Apollo and Blackstone are entering the space as clubs await payments and traditional banks step back

• Water Ponzi scheme exposed: U.S. authorities have unsealed fraud charges involving over $200mm tied to a water-vending machine Ponzi scheme that entangled dentists, veterinarians, and a former Jefferies fund manager

• Netskope IPO filing reveals fast growth: Netskope’s SEC filing shows roughly 31 % year-over-year growth (annual recurring revenue of $707mm), with net losses narrowing as it scales ahead of its U.S. IPO. The SASE security firm hopes its public debut will accelerate awareness and growth

• HSBC tightens its Swiss books: HSBC’s Swiss private bank is cutting ties with more than 1,000 wealthy Middle Eastern clients holding assets over $100mm, amid regulatory pressure over lax anti-money-laundering checks. Finma previously barred the bank from onboarding politically exposed persons, after finding systemic due diligence failures in past transactions

• Solar executives warn of higher energy prices: Arevon CEO Kevin Smith warns that Trump’s attack on solar and wind projects will harm the electric grid and lead to higher prices for consumers

• OnlyFans owner cashes out big: Leonid Radvinsky pulled a record $701mm in dividends as OnlyFans positions itself for a possible multibillion-dollar sale. The platform’s 2024 revenue rose 9% to $1.4B with $7.2B in payments processed

• The Weeknd eyes catalog financing: Abel “The Weeknd” Tesfaye is pursuing a $1B raise backed by his music catalog IP - part of a growing trend where top artists monetize future streaming royalties through debt and private markets

• Private equity fundraising slumps: PE firms raised just $592B in the 12 months to June, the lowest in seven years, even as they rolled out steep discounts to lure investors. Higher rates, slow exits, and an oversaturated manager landscape have left LPs reluctant to commit fresh capital, forcing funds to rewrite the rule book on fundraising

M&A Transactions💭 

Electrical Components International, manufacturer of wire harnesses, was acquired for $1.9B by Rosebank Industries. EV/EBITDA was 9.0x. Rothschild & Co, Guggenheim Securities, and Goldman Sachs advised on the sale.

Doosan Vina, provider of green energy equipment, has reached a definitive agreement to be acquired for KRW 290.0B by HD Korea Shipbuilding & Offshore Engineering (KRX: 009540).

Shermco Industries, provider of electrical maintenance and design services, has reached a definitive agreement to be acquired for $1.6B by Blackstone. Harris Williams advised on the sale.

McCormick de Mexico, producer of spices and condiments and a subsidiary of Grupo Herdez (MEX: HERDEZ), has reached a definitive agreement to be acquired for McCormick & Company (NYS: MKC) for $750.0M.

Interius BioTherapeutics, developer of a generic medicines precision delivery platform, has reached a definitive agreement to be acquired for $350.0M by Kite Pharma. Evercore Group advised on the sale.

Wipro (BOM: 507685) reached a definitive agreement to acquire The Digital Transformation Solutions (DTS) Business Unit of Harman International Industries for $375.0M. Deutsche Bank advised on the sale.

American Industrials Partners has entered into a definitive agreement to acquire The Cellulose Fiber Pulp Mills of International Paper (NYS: IP) for $1.5B. Morgan Stanley advised on the sale.

Dream Residential (TSE: DRR.U), Canada based open-ended, real estate investment trust, has reached a definitive agreement to be acquired for $353.088M by Morgan Properties. EV/EBITDA was 108.21x and EV/Revenue was 7.31x. TD Securities advised on the sale.

Dayforce (NYS: DAY), a global technology company, has reached a definitive agreement to be acquired for $12.42B by Thoma Bravo and Abu Dhabi Investment Authority. EV/EBITDA was 38.16x and EV/Revenue was 6.7x. Evercore Group advised on the sale.

PPF Group, operator of an investment group, was acquired for CZK 40.0B by Ms. Renata Kellnerova and Daughters.

DIG Airgas, manufacturer of industrial gases and related tools, has reached a definitive agreement to be acquired for EUR 2.85B by Air Liquide (PAR: AI). J.P. Morgan and Goldman Sachs advised on the sale.

Private Placement Transactions💭 

Syncromune, developer of intratumoral immunotherapy, raised $131.83M through a combination of Series A venture funding from Wasatch Equity Partners and other undisclosed investors at a pre-money valuation of $122.17M.

Ontic, developer of protective intelligence platform, raised $230.0M of Series C funding led by Kohlberg Kravis Roberts.

Nuro, developer of autonomous vehicle technology, raised $203.0M of Series E venture funding from Pledge Ventures, Uber, and Nvidia at a pre-money valuation of $5.8B.

Mitra, operator of a social commerce platform, raised $140.0M of venture funding in the form of convertible debt from Bestvantage Investments.

A Rate Cut is back on 🍒 

Kalshi traders are pricing in a 76% chance of a September rate cut.

*New Traders on Kalshi receive a $20 bonus of trading credit when depositing $100+ with the code “HYH”.

Noteworthy Chart 🧭

Meme Cleanser 😆 

Until next time!

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