What you Need to Know for May 22nd

Private credit default rate hits record high, NVIDA beat expectations

Author

HY Harry
May 22, 2026

Welcome back

Fitch's U.S. Private Credit Default Rate hit a record 6.0% yesterday, signaling strain on middle-market borrowers navigating higher-for-longer capital costs, a pressure compounded by secondary macro models showing Core PCE tracking at a stubborn 4.3% annualized clip to keep Fed rate cuts firmly off the table for the remainder of 2026. Equities managed to shake off that macro gloom during yesterday's session, turning positive as a midday reversal in oil prices gave breathing room to bonds, lifting the Dow 0.6%, the S&P 500 0.2%, and the Nasdaq 0.1%.

Earnings Corner 💸 

  • NVIDA $NVDA ( ▼ 1.77% ) revenue beat expectations at $82B vs. $79B, and EPS beat at $1.05 vs. $0.94, with total revenue up 85% to a record high. Results were driven by explosive AI infrastructure demand and continued Blackwell GPU adoption across hyperscalers, cloud providers, enterprises, and sovereign AI projects. Data center revenue surged 92% to $75B as networking revenue nearly tripled and AI cloud demand accelerated. Nvidia also guided Q2 revenue to $91B, raised its dividend, expanded buybacks, and stated that demand for AI compute and inference has “gone parabolic.”

  • Lowes $LOW ( ▼ 1.65% ) slightly missed revenue expectations at $20.9B, while EPS beat at $3.03. Results were driven by continued demand for smaller repair and maintenance projects, appliances, home services, and online sales. Strength from professional contractors also boosted performance as homeowners avoided moving, opting instead for lower-cost upgrades and necessary replacements in a high mortgage-rate environment. Comparable store sales rose 0.6%—slightly below expectations—as larger DIY renovation projects remained weak and consumers continued delaying big-ticket discretionary purchases. While margins benefited from solid cost control and strong gross margin performance, and the company reaffirmed its full-year guidance, Q2 EPS guidance came in light due to higher promotional, transportation, and energy costs alongside continued housing market pressures.

  • Target $TGT ( ▲ 3.12% ) revenue beat expectations at $25.4B, and EPS beat at $1.71. Sales were driven by stronger store and digital traffic, growth in same-day delivery and Target Circle 360 memberships, and improved demand for refreshed product assortments as turnaround efforts and store remodels gained momentum. Comparable store sales rose 5.6% across both physical and digital channels. Meanwhile, margins benefited from lower markdowns, stronger supply chain productivity, and higher advertising and marketplace revenue. The company raised its full-year outlook but remained cautious regarding consumer spending and potential margin pressures later this year.

  • Toll Brothers $TOL ( ▼ 1.32% ) revenue beat expectations at $2.53B vs. $2.42B, and EPS beat at $2.72 vs. $2.58. Results were supported by higher average selling prices, growth in signed contracts and community counts, and continued demand for luxury homes as wealthier buyers remained insulated from high mortgage rates and economic uncertainty. Margins also improved due to a shift toward higher-end homes and upgrades, alongside enhanced construction efficiencies and earlier spec-home sales. The company raised its full-year delivery and margin guidance despite broader housing market pressures.

  • Workday $WDAY ( ▼ 3.76% ) delivered a top- and bottom-line beat as steady demand for HR and finance software, solid subscription growth, and the rising adoption of AI agents helped ease fears that artificial intelligence will cannibalize traditional software players. Margins improved on operating efficiencies, and management raised its full-year margin outlook as annualized AI agent revenue approaches $500M. However, subscription revenue guidance only met expectations.

On The Move 📈 📉

IPO Roundup 📍 

  • SpaceX filed its S-1 on Wednesday and is now lined up to raise $80B+ at a $1.75T–$2T valuation, which would make it the largest IPO in history. 2025 revenue hit $18.67B, up 33% year-over-year, though a $4.94B net loss reflected a heavy R&D buildout. SpaceX is set to begin trading on the Nasdaq around June 12, with Goldman Sachs leading the offering alongside Morgan Stanley, Bank of America, Citigroup, and JPMorgan.

  • Oura Health Oy filed confidentially for an IPO on Thursday. The Finnish smart-ring maker is eyeing a public debut later this year off an $11B private valuation, with revenue on pace to hit $1.5B in 2026. Goldman Sachs, Morgan Stanley, JPMorgan, Allen & Company, and Jefferies are leading the offering.

  • Deep Fission Inc. is targeting up to $156M in its Nasdaq IPO, pricing 6 million shares at $24–$26 for a $1.66B valuation. The startup is developing small nuclear reactors buried a mile underground, an approach designed to cut costs by up to 80%. William Blair, Stifel, and Canaccord Genuity are leading the offering.

  • Blockchain.com Group Holdings Inc. filed confidentially for an IPO on Thursday. The Dallas-based crypto firm is targeting a public debut this year off a private valuation under $7B, down from a $14B peak in 2022. The filing lands as crypto IPOs heat back up, with Gemini and Bullish already trading and Kraken still in the queue.

  • SB Energy filed confidentially for an IPO on Wednesday, with the SoftBank- and OpenAI-backed power developer aiming to capitalize on surging demand for AI infrastructure. Founded in 2019, the company has raised over $18B in project capital and developed roughly 5 GW of energy capacity.

  • Authentic Brands Group is targeting an IPO within 12 months after two prior failed attempts, with founder Jamie Salter moving to Executive Chairman and former Wynn Resorts chief Matt Maddox stepping in as CEO. The Reebok, Champion, and Sports Illustrated parent generated roughly $38B in 2025 retail sales and is seeking a $100B valuation within five years.

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Today’s Headlines 📖🍿 

  • U.S. private credit default rate hits record 6.0% as late-cycle capital stress intensifies: Driven by heavy pressure in the consumer products and healthcare sectors, the Trailing Twelve Month (TTM) private credit default rate hit an all-time high in April. The data underscores systemic tightening, with 55% of recent default events stemming from interest payment deferrals and emergency restructuring.

  • Core PCE reaccelerates to 3.2% pace; rate cut hopes shelved as inflation remains sticky into Q2: The benchmark 10-year note climbed 14 basis points in a matter of days to reach its highest level in nearly a year. The move is rapidly tightening broader financial conditions, driving up corporate borrowing costs, compressing the equity risk premium, and threatening to push 30-year fixed mortgage rates past the 6.2% mark.

  • Fed minutes highlight stabilization of private credit sentiment amid persistent valuation opacity: The Federal Reserve’s April 2026 meeting minutes (released May 20) noted that despite ongoing redemption requests, investor sentiment in the private credit sector shows signs of stabilization, marked by tightening credit spreads and rebounding BDC equity prices. However, regulators continue to closely monitor structural vulnerabilities, heightened leverage, and valuation opacity across the sector.

  • SEC proposes sweeping offering reforms and lifting of ‘one-year seasoning’ for listed BDCs and closed-end funds: The SEC's new capital formation proposals aim to streamline public company frameworks and expand retail investor access to alternative vehicles. A major highlight is the removal of the "One-Year Seasoning" requirement for listed BDCs and closed-end funds, allowing managers to execute at-the-market offerings on day one and significantly lowering compliance costs associated with state-by-state registration.

  • U.S. Commerce Department unveils $2 billion quantum computing blitz, taking equity stakes in tech heavyweights: In a massive intervention in the domestic advanced-tech market, the U.S. Department of Commerce signed letters of intent on May 21 to deploy $2 billion in CHIPS Act incentives into nine quantum computing firms. Highlighting the package is a $1 billion grant to stand up "Anderon", a standalone, pure-play 300mm quantum wafer foundry backed by IBM in Albany, NY, with the government taking equity positions in exchange for funding to solidify national security and global supply chain leadership.

  • Trump sets multi-day deadline for Iran negotiations as Senate voted to limit executive war powers: The conflict escalated significantly on May 19 as President Trump warned that the U.S. could resume airstrikes by early next week if a comprehensive deal isn't reached within "two or three days." Concurrently, the U.S. Senate voted to advance a historic War Powers Resolution aimed at capping unauthorized military action in Iran. Meanwhile, maritime friction intensified as the U.S. Marines seized a U.S.-sanctioned, Iranian-linked oil tanker in the Asian shipping lanes, prompting Tehran to threaten an expansion of the war beyond the Middle East.

  • Scion Group and Ares Management buy $910M US student housing portfolio: The newly formed partnership acquired 12 properties totaling 7,578 beds from Harrison Street Asset Management. The portfolio features sites near the University of Notre Dame, Ohio State University, and James Madison University. Scion will serve as the operating partner, with the venture targeting off-campus housing near top-tier universities.

  • Socket reaches $1B valuation in $60M cybersecurity round: Josh Kushner’s Thrive Capital led the financing round, with participation from Andreessen Horowitz, Abstract Ventures, and new backer Capital One Ventures. The startup, which safeguards open-source code against hackers, has rapidly gained traction as AI coding tools from Anthropic, OpenAI, and Cursor drive unprecedented demand for code security.

  • StraightPath founders sentenced to prison for $386M pre-IPO fraud: Michael Castillero, Brian Martinsen, and Francine Lanaia received 11, 10, and 8 years in prison, respectively, for inflating share values and charging hidden fees on investments pitched as cheap access to late-stage private companies, including Impossible Foods and Kraken. The trio skimmed $75M for themselves and were ordered to pay $115M in restitution.

  • EQT eyes distressed software companies after sector sell-off: Bert Janssens, EQT's co-head of private capital, stated that the firm is positioned to acquire overleveraged software businesses unable to refinance, noting that more than $200B in high-yield and leveraged tech debt comes due through 2028. Concurrently, EQT is pursuing a $12.4B take-private of UK testing firm Intertek as it tilts toward services, industrials, and public market opportunities.

  • Anthropic signs $45B computing deal with SpaceX: Anthropic will pay SpaceX $1.25B per month through May 2029 for computing capacity to power its Claude AI models. The capacity will ramp up throughout May and June 2026 at a reduced introductory fee. The deal expands an earlier agreement for 300-plus megawatts at SpaceX’s Colossus 1 data center in Memphis and integrates a second site under the partnership.

  • Warner Bros. creditors urged to fight for better deal terms: Law firm Milbank is rallying bondholders to form an alliance ahead of the May 26 deadline, as Warner Bros. requests creditors to swap existing debt for new junior notes secured by nearly all assets of the combined Warner-Paramount entity. Citigroup and Bank of America are running the exchange, which CreditSights warned carries “substantial downside” for holdout noteholders.

  • James Murdoch’s Lupa Systems acquires New York magazine and Vox podcast network: The deal includes major shows like Pivot with Kara Swisher and digital brands including The Cut and Intelligencer, but excludes core Vox Media properties such as The Verge and Popsugar. The newly consolidated entity will retain the Vox Media name and continue under the leadership of co-founder Jim Bankoff. Bloomberg previously valued Murdoch’s offer at roughly $300M.

  • Stellantis unveils €60B turnaround plan: CEO Antonio Filosa’s “FaSTLAne 2030” strategy targets €190B in revenue by 2030 and positive free cash flow by 2027, recovering from a free cash flow loss of €22.3B and a net profit loss of €4.5B last year, respectively. The plan directs 60% of product investment toward North America, aims for €6B in annual cost savings by 2028, and consolidates architectures into a new, unified STLA One platform.

  • Goldman Sachs wins SpaceX IPO lead left, edging out Morgan Stanley’s Michael Grimes: Goldman Sachs, which drafted SpaceX’s S-1 in December and holds sole control over pricing, the roadshow, and allocations, outmaneuvered rival Morgan Stanley after Grimes’ temporary stint in the Trump administration cost him daily access to the rocket company. However, Morgan Stanley retains the stabilization mandate, which insiders call potentially the most lucrative role in the syndicate.

  • Arctos Partners takes 10% Cleveland Browns stake at $9B valuation: three-tranche deal transaction values the franchise at a 47% premium to Sportico’s baseline $6.1B valuation, continuing a private equity-driven re-rating of NFL minority stakes. Arctos already holds passive equity positions in the Buffalo Bills and Los Angeles Chargers.

M&A Transactions💭 

Huta Czestochowa, manufacturer of heavy steel plates, has reached a definitive agreement to be acquired for EUR 265.0M by Agencja Mienia Wojskowego and Weglokoks. EV/Revenue was 0.31x.

PSB Holdings, a full-services financial institution, has reached a definitive agreement to be acquired for $361.894M by Bank First (NAS: BFC). EV/Net Income 25.25x and EV/Revenue was 6.67x. Raymond James advised on the sale.

The Logistics Assets of Project Volt was acquired by EQT for GBP 550.0M.

Engage Bio, developer of mRNA therapeutics platform, was acquired for $202.0M by Eli Lilly (NYS: LLY).

CarTrawler, developer of a business-to-business travel technology platform, has reached a definitive agreement to be acquired for $350.0M by Expedia Group (NAS: EXPE).

Caliber Resource Partners, operator of an energy investment firm, has reached a definitive agreement to be acquired for $1.3B by NextEra Energy (NYS: NEE).

PlayStack, operator of game publishing services, has entered into a definitive agreement to be acquired for GBP 112.4M by Integrated Media Company.

Park Holidays UK, operator of holiday parks and communities, has entered into a definitive agreement to be acquired for GBP 768.0M by Aermont Capital. Lazard advised on the sale.

Jaypee Fertilizers & Industries, manufacturer of fertilizer and agriculture chemicals, has reached a definitive agreement to be acquired for INR 15.0B by Adani Ports and Special Economic Zone (BOM: 532921).

Equity Residential (NYS: EQR), owns a portfolio of 312 apartment communities, has reached a definitive agreement to be acquired for $77.64B by AvalonBay Communities (NYS: AVB). EV/EBITDA was 34.21x and EV/Revenue was 24.94x. Bank of America, Centerview Partners, and Morgan Stanley advised on the sale.

Circor Aerospace, manufacturer of fluidic control components, has reached a definitive agreement to be acquired for $2.55B by Parker-Hannifin (NYS: PH). Evercore Group and Goldman Sachs advised on the sale.

IBV Brasil Petroleo, provider of drilling services, has reached a definitive agreement to be acquired for $270.0M by Bharat Petroleum Corporation (BOM: 500547).

H.D. Lee Company, manufacturer of denim apparel, has entered into a definitive agreement to be acquired for $1.0B by Authentic Brands Group. Morgan Stanley advised on the sale.

Private Placement Transactions💭 

JNP Global, provider of customized accelerator, received $5.0B of financing from Mr. Yoo Seung-kyo, Chairman of Withtech.

Gradiant, operator of a water company, raised $400.0M of Series E venture funding led by Safar Partners and Hostplus Superannuation Fund at a pre-money valuation of $1.7B.

Full-Life Technologies, developer of radiotherapeutics technologies, raised CNY 1.0B in venture capital through a combination of debt and equity. CNY 750.0M of Series D was led by Vivo Capital.

Vi Labs, developer of an enterprise AI platform, raised $145.0M of venture funding led by Revelstoke Capital Partners and The Pritzker Organization at a pre-money valuation of $1.5B.

SendCutSend, operator of an online laser-cutting service, raised $110.0M of venture funding led by Paradigm, Sequoia Capital, Patrick Colluson, and John Collison at a pre-money valuation of $900.0M.

Iscon Balaji Foods, producer of frozen potato products, raised $220.0M of Series A venture funding from Advent International and 360 ONE.

Primer, developer of an automated payment ecosystem, raised $100.0M of Series C venture funding led by Sofina.

Mercury, developer of digital banking tools, raised $200.0M of Series D venture funding led by TCV at a pre-money valuation of $5.0B.

Exa Labs, developer of an AI-powered search engine, raised $250.0M of Series C venture funding led by Andreessen Horowitz at a pre-money valuation of $1.95B.

cAMPfield Therapeutics, developer of biotechnology research, raised $180.0M of Series A venture funding from Longitude Capital.

Farther, operator of an investment advisory firm, raised $150.0M of Series D venture funding led by General Atlantic.

Hark, developer of a personal intelligence platform, raised $700.0M of Series A venture funding led by Parkway Venture Capital at a pre-money valuation of $5.3B.

Odds of the Day 🍒 

Polymarket traders are pricing in a 81% chance of the Democratic Party winning the House in 2026.

Noteworthy Chart 🧭

Private Credit Vulnerabilities: PMR Default Tracking

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