September 7th - The Week Ahead

The Week Ahead Of Us 🔍

Welcome back!

After an ugly jobs report, we now have talks of potentially two rate cuts this year or a 50bps cut by the Fed. The Fed is in a really tough spot, as the jobs slowdown is tariff induced but tariff related inflation is potentially on the cards (we get CPI numbers later this week). The weakening labor market though is ultimately enough ammo for the Fed to cut, with the market shrugging off labor market worries at the moment.

As a reminder, here’s a Private Credit Analyst and IR Professional job posting (both NYC based). There’s also going to be some LA-based private credit roles going live too so make sure you hover around the Buyside Hub job board as the opportunities go live.

Here’s a look at earnings this week.

• Monday: Caseys General Stores, Korea Electric Power, KT Corp

• Tuesday: Oracle, Synopsys, Lands' End, GameStop, Rubrik, AeroVironment, Nebius

• Wednesday: Chewy

• Thursday: Adobe, Kroger, RH, Rent the Runway

• Friday: Value Line

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

• Monday: Consumer credit (15.0B)

• Tuesday: NFIB optimism index (100.6)

• Wednesday: Producer price index (0.3%), Core PPI (0.6%), PPI year over year (3.3%), Core PPI year over year (2.8%), Wholesale inventories (0.2%)

• Thursday: Consumer price index (0.3%), CPI year over year (2.9%), Core CPI (0.3%), Core CPI year over year (3.1%), Initial jobless claims (234,000), Monthly U.S. federal budget (290.0B)

• Friday: Consumer sentiment (58.0)

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Earnings Corner 📈 📉

Broadcom $AVGO ( ▲ 9.41% ) beat with revenue at $15.96B and EPS of $1.69 vs. $1.65. AI sales jumped 63% y/y to $5.2B. Management guided to EBITDA margins of at least 67% and highlighted what would be 11 straight quarters of AI revenue growth. Hock Tan disclosed a $10B custom AI chip order from a new “mystery” hyperscaler, fueling speculation it could be OpenAI. Broadcom generated $7B in FCF, ended the quarter with $10.7B cash, and declared a $0.59 dividend. Guidance for revenue next quarter was set at $17.4B which is above estimates.

Lululemon $LULU ( ▼ 18.58% ) Revenue missed and came in at $2.53B vs. $2.54B est., while EPS beat at $3.10 vs. $2.88. In the Americas, same store sales fell 4%, and global same store sales rose just 1%. Gross margin also declined. Management admitted product cycles in lounge and social categories have “run too long” and pledged a reset. Full-year guidance was cut sharply, with EPS lowered to $12.77–$12.97 vs. $14.45 est. and revenue to $10.85–$11B vs. $11.18B, citing a $240M tariff hit and the loss of the de minimis exemption.

DocuSign $DOCU ( ▲ 4.75% ) Both top and bottom line beat, with revenue at $800.6M vs. $780.2M est. and EPS at $0.92 vs. $0.84. Subscription revenue rose 9% y/y, offsetting a 13% drop in professional services. Billings grew 13%, and gross margin held steady at 82%. Management raised its fiscal 2026 revenue outlook to $3.19–$3.2B, citing strong adoption across eSignature, CLM, and IAM products.

For deeper, stock market research upgrade to the WSR Investing Club. We just did a situation overview writeup in advance of Lululemon’s tough earnings results. We’re doing the same soon for other topical names that are facing headwinds such as Constellation Brands and Adobe.

Today’s Headlines 🍿 

• Jobs miss: Unemployment of 4.3% was in line with expectations, but August nonfarm payrolls of +22k was a big miss relative to expectations of +75k. Health care (+31k) and social assistance (+16k) added the most jobs, while wholesale trade and manufacturing both dropped 12k on the month. July gains were revised upward by 6k to +79k, while June now shows a net loss of 13k jobs

  • Notably unemployment for 16-24 year olds of 10.5% is more than double the national unemployment rate and in line with prior late cycle levels

• BofA expects 2 rate cuts, forecasting cuts of 25 bps in both September and December after a soft jobs report. For 2026, BofA projects an additional 75 bps of easing

• Bessent warns on tariff refunds - while confident Trump will win upon the Supreme Court’s review, U.S. Treasury Secretary Bessent warned that tariff refunds could result in a situation where $750B to $1T of tariffs would need to be unwound

• Fed Chair finalists: Trump announces that Kevin Hassett, Christopher Waller, and Kevin Warsh are “the top three” options to replace Powell

• Gold bars get tariff exemption: Trump issued an executive order to exempt gold, graphite, tungsten, uranium, and other metals from country-based tariffs

• Goldman’s stake in T. Rowe: The bank will invest up to $1B in T. Rowe stock and team up with the asset manager to sell private market products to retail investors, mainly retirement savers. The news sent T. Rowe shares up almost 6% on Thursday

• Citi is giving BlackRock $80B of assets - a move to outsource its wealth management unit as the bank closes its only remaining in-house asset manager. BlackRock will receive management fees, while Citi will continue to receive advisory fees for providing clients with guidance on overall wealth strategy

• Carlyle’s $20B secondary fund: The private capital group’s AlpInvest unit has raised a total of $20B to buy aging PE stakes at a discount from pension funds and other investors who are have struggled to find exits

• Gas-powered cars are back: GM, Ford, and Stellantis have shifted investment into gasoline-fueled vehicles while cancelling production plans for several EVs. Trump’s push to cut sales incentives and roll back emissions standards “has the potential to unlock a multibillion-dollar opportunity” says Ford CEO

• CNBC’s wealthiest NFL teams: Dallas leads the way with $1.3B of revenue and a $12.5B valuation for the Cowboys. The LA Rams are next at $10.7B, and the New York Giants are 3rd with a $10.5B valuation after selling a 10% stake to the Koch family

• Amazon curbs free shipping sharing: The company is ending its Prime Invitee program, which allows Prime users to share free-shipping benefits with four other adults, in an attempt to add more paying Prime members

• OPEC to boost oil output: Eight OPEC+ members said they would raise production by 137k barrels a day in October, a change from expectations that output would remain steady amid a looming supply glut

• Elon’s $1T pay package: Tesla proposed a pay package for its CEO that aligns Musk with rapidly growing Tesla’s market cap, offering up to $975B to Musk if the company reaches a $8.5 trillion market cap

• ASML to become Mistral’s AI top shareholder: After investing $1.5B in Mistral’s $2B Series C, the chipmaking equipment company will become the largest shareholder in Europe’s top AI startup

• BlackRock leads $550mm private credit deal: BlackRock, Guggenheim, and 26North were among the firms providing Syndigo, a Summit and TJC backed software platform, with private credit financing

• Podcast of the Day - PE took over a hospital that later shuttered. The WSJ did a 15 minute deep-dive on a Chester, PA based Hospital acquired by PE that eventually had to shutter because of the high leverage profile

M&A Transactions💭 

Yashili New Zealand Dairy, producer of nutritional milk powders intended for infants, was acquired for NZD 282.0M by The a2 Milk Company (ASX: A2M). E&P Capital advised on the sale.

Vectorious, developer of a monitoring system, was acquired for $497.0M by Edwards Lifesciences (NYS: EW).

UST HealthProof, developer of a healthcare administration platform, was acquired for $1.0B by HealthEdge. J.P. Morgan and Goldman Sachs advised on the sale.

The Browser Company, developer of a web browser, has reached a definitive agreement to be acquired for $610.0M by Atlassian (NAS: TEAM).

Samhwa, manufacturer of packaging materials, was acquired for KRW 733.0M by Kohlberg Kravis Roberts. EV/EBIDTA was 11.92x and EV/Revenue was 2.64x.

ProSiebenSat.1 Media (ETR: PSM), a German mass media and digital company, has reached a definitive agreement to be acquired for EUR 1.8B by MFE - MediaForEurope (MIL: MFEB). EV/EBITDA was 34.44x and EV/Revenue was 3.21x.

MSC Software, developer of simulation software, has reached a definitive agreement to be acquired for EUR 2.7B by Cadence Design Systems (NAS: CDNS). Evercore Group advised on the sale.

MAG Silver, a Canadian mining company, was acquired for $2.145B by Pan American Silver (TSE: PAAS). EV/EBITDA was 20.43x. BMO Capital Markets, GenCap Mining Advisory, and Raymond James advised on the sale.

A 2,179-bed Portfolio of Seven Purpose-Built Student Accommodation Across the UK of CBRE Investment Management was acquired by Kohlberg Kravis Roberts for GBP 230.0M.

Gypsum Management & Supply (NYS: GMS), a distributor of specialty building products, was acquired for $5.5B by SRS Distribution. EV/EBITDA was 13.35x and EV/Revenue was 1.0x. Jefferies advised on the sale.

Freddy’s Frozen Custard & Steakburgers, operator of a fast-food restaurant chain, was acquired for $700.0M by Rhone Group. William Blair & Company and North Point Mergers & Acquisitions advised on the sale.

CSIC Haizhuang, developer and manufacturer of offshore power generation equipment, was acquired for CNY 6.093B by CSSC Steel Structure Engineering Company (SHG: 600072).

AccessOne, developer of a financial engagement platform, has reached a definitive agreement to be acquired for $160.0M by Phreesia (NYS: PHR). EV/EBITDA was 14.55x and EV/Revenue was 4.57x. Houlihan Lokey advised on the sale.

Maritime Resources (TSX: MAE), a gold exploration and development company, has reached a definitive agreement to be acquired for CAD 292.0M by New Found Gold (TSX: NFG). EV/Revenue was 87.05x. Canaccord Genuity, Paradigm Capital, and SCP Resource Finance advised on the sale.

Carlisle Health, provider of diagnostic services, has entered into a definitive agreement to be acquired for $200.0M by Quadrant Private Equity.

Rithm Capital Corporation, the parent company of nationwide mortgage lender and servicer Newrez LLC, has entered into a definitive agreement to acquire Crestline Management, an alternative investment manager with $17.0B in assets under management.

Private Placement Transactions💭 

Sierra, developer of a conversation AI platform, raised $350.0M of venture funding led by Greenoaks Capital Partners at a pre-money valuation of $9.65B.

Mistral AI, developer of an open-source AI platform, raised EUR 2.0B of venture funding from undisclosed investors at a pre-money valuation of EUR 10.0B.

Lightelligence, developer of an optical computing platform, raised $10.0M of Series C venture funding from China Reform Holdings Corporation, China Mobile Capital, and Shanghai State-owned Capital Investment.

Enveda, developer of a drug analysis platform, raised $150.0M of Series D venture funding led by Premji Invest.

Baseten, developer of machine learning models, raised $150.0M of Series D funding led by BOND Capital.

Odds of the Day 🍒 

Kalshi traders are pricing in a 64% chance of Severance winning the Emmy for best Drama.

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

Noteworthy Chart 🧭

The spread between IG and BB risk is shrinking, and at roughly 80bps, a very tight risk premium:

Meme Cleanser 😆 

Until next time!

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