Another SpaceX Success

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Good Morning,

In a world full of soaring yields, we also got soaring rockets. SpaceX successfully launched its massive Starship rocket into the orbit for the first time ever, deployed 26 of its Starlink v3 satellites, and made a successful soft splashdown in the Gulf of America. All while one engine failed…

So incredibly inspiring to witness the kind of innovation that humans are working on in our lifetime…

Mizuho's equity research team published some interesting insights into opportunities in physical AI amid the backdrop of AI safety threats and risks to humanity. Read more here.

Let's dive in.

Before The Bell

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Markets

• US stocks slipped yesterday as yields rose further on a standoff between US and Iran

• China's CSI 300 index hit a one-year low as optical companies sank on proposed US sanctions

• US 10Y yield is nearing its highest since 2002

• US 2Y yield is teasing 5%

• EM debt turned negative YTD and is on track for its worst month since the Iran war

  • South Korea's 3Y yield jumped 11 bps to 4.11% to its highest since November 2022

Earnings

• Jefferies posted record equities trading revenue in Q3 but its asset management unit revenue slumped more than 50% as the bank grapples with the fallout from tumultuous investment (BBG)

• What we're watching this week:

  • Today: CarMax

  • Wednesday: Micron

  • Thursday: Nike, Accenture

• Full calendar here

Prediction Markets

• Markets are pricing in two MORE Fed rate hikes by year-end as high inflation readings are being accompanied by otherwise resilient economic data.

• Get a $50 bonus with code LIT on signup, only on the Polymarket US app

Headline Roundup

• BOJ debated need for faster rate hikes (RT)

• Yield curve inversion becomes new risk as Fed hikes (BBG)

• Soaring yields lead traders to snap up options on BlackRock ETFs (BBG)

• High-yield debt deluge is overwhelming investors (BBG)

• Rich turn to borrowing against PE holdings as payouts slow (FT)

• Foreign capital flows into US stocks hit record as appetite for debt fades (FT)

• Global funds end underweight position on China after four years (BBG)

• Financial stress spreads in Europe as leverage mounts (BBG)

• 24/7 stock trading is about to test financial markets (BBG)

• Real estate secondaries hit a record a $20B last year (YH)

• Nvidia announced a record $150B share buyback ‌(RT)

• Prediction markets push into US stocks raises regulatory alarm bells (RT)

• OpenAI abandons plan to release new model amid safety concerns (CNBC)

• Meta launches enterprise AI business seeking to cash in on vast spending (FT)

• SpaceX successfully launched Starship into orbit for the first time (CNBC)

A Message from Mizuho

For years, AI headlines have largely focused on the latest developments in advanced models and the capital required to fund frontier research. More recent discussions have centered on whether development needs to slow, lest these models threaten the future of human civilization. These lofty questions - and the trillions of dollars invested in answering them - are likely to play a prominent role in how AI reshapes multiple sectors of the US economy.

In the industrial sector, however, we believe the emergence of physical AI is already impacting operations on the factory floor, and this uptake shows few signs of slowing down

Deal Flow

M&A / Strategic

• Aussie gold miner Northern Star Resources rejected a $27.2B takeover proposal from South Africa's Gold Fields as undervalued

• German chemical producer Evonik Industries rejected a $11.7B merger offer from peer BASF

• AMD will acquire Fei-Fei Li's real world AI start World Labs for for $8B

• CVC dropped its pursuit for UK industrial heat treatment specialist ‌Bodycote to clear way for Veritas ​Capital to acquire the firm for $2.45B, including debt

• PE firms Bridgepoint and Astorg are considering selling Irish financial compliance software Fenergo at an over $2.7B valuation

• Aviation-services supplier AAR agreed to buy a 65% stake in aircraft-maintenance company MRO Holdings for $1.8B

• The sale of Antin Infrastructure Partners-owned Portuguese water utility Indaqua was delayed after potential bidders requested additional information before submitting $1.5B binding offers

• PE firm Warburg Pincus made an improved $1.50B offer for Australian developer Ingenia Communities

• Tata Trusts, the majority shareholder of India's Tata Sons, proposed that the holding company of India's biggest conglomerate merge with two of its unlisted units Tata Electronics Systems Solutions and Tata Consulting Engineers to stave off a listing order

• Belgium printer IT company Agfa Gevaert will merge its digital printer solutions business with PE firm Siris-backed Electronics for Imaging to form a $1B enterprise

• Irish Residential Properties REIT will recommend a potential $830M all-cash takeover from asset manager Barings

• Singaporean SWF Temasek acquired a 9% stake in the management company of Italian PE firm FSI

• BP is weighing a sale of its Brazilian biofuels business

• Nicaragua has handed mining concessions covering more than a 10% of its land to Chinese companies

VC

• Fluidstack, an AI infrastructure company, raised $1.5B at a $18B valuation in a financing led by Jane Street

• Instinct, a viral AI agent startup, raised a $1B Series C at a $10B valuation from investors Sequoia, Benchmark, and Coatue

• SiMa.ai, a physical AI chip developer, raised a $150M Series C at a $1.45B valuation co-led by Fidelity and Amplify

• Quartermaster, a maritime intelligence startup, raised a $140M Series B led by Insight Partners

Access the complete VC deal flow and data on Fundable

IPOs / Listings / Issuances / Block Trades

• KKR-backed Indian agrochemical producer Advanta Enterprises is set to raise $400M at a $4B valuation in an India IPO

• Blockchain.com is targeting a $500M IPO this year

SPAC / SPV

• AE Industrial Partners-backed cyber defense tech firm RedLattice will merge with Bold Eagle Acquisition Corp. in a $1.25B deal, including debt

• Satellite maker Astro Digital will merge with Proem ‌Acquisition Corp I in a $560M deal

Debt

• Paramount Skydance plans to sell over $44B of bonds to fund its $110B acquisition of Warner Bros. Discovery

• Leonard Green & Partners and KKR-backed gym operator PureGym is seeking to raise $1.9B in a high-yield bond sale

• Indian conglomerate Reliance Group plans to raise $1B in an ABS sale

• Two state-run Indian companies Sagarmala Finance and Small Industries Development Bank of India withdrew plans to sell $688M in rupee bonds

Bankruptcy / Restructuring / Distressed

• Getty Images is in confidential talks with lenders for a potential bankruptcy loan

• Creditors to telecoms firm Optimum Communications sued, demanding the firm unwind transfers they claim siphoned away value out of their reach and into the pockets of insiders, including owner Patrick Drahi

Funds / Secondaries

• Seligman Ventures raised deployable capital to $1B less than a year after launch

Crypto Sum Snapshot

• Citigroup expands crypto footprint with Coinbase partnership

• Senate investigation finds rampant use of Tether's stablecoin by Iranian regime

Crypto Sum compiles the most important stories on everything crypto. Read it here.

Exec's Picks

• Golub Capital didn't just invest in F2. It chose F2 to power its next $100B in assets. The partnership brings agentic AI into direct lending, putting proprietary deal history to work while keeping firm data protected. Schedule a demo with the F2 team.

• Ben Carlson tried making sense of the mysterious case of why the stock market has shrugged off higher rates.

Upcoming Events⛳️

The Litquidity x NEXUS Capital Cup | Saturday, 10/17 | NYC

For the second year running, we're bringing together NYC's best on NEXUS Golf Club's state of the art simulators on Saturday, October 17 for a shot at over $9,000 in prize value and NYC glory. What's at stake: a $500 cash prize, a six month membership to NEXUS with $150 in F&B rewards, twosomes to Manhattan Woods Golf Club, a TrueSpec Club Fitting, and a plethora of other prizes listed on our @palmandparkevents Instagram + event page.

Whether you want to grab your favorite golf buddy, be matched with a partner, or simply watch and mingle, there's gonna space for you. Last year's tournament was epic so we hope to see y'all this time around!

RSVP details here

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*DISCLAIMER: Investment advice provided by Autopilot Advisers, LLC ("Autopilot"), an SEC-registered investment adviser. Past performance does not guarantee future results. Investing carries risks, including loss of principal. As always, be smart out there. Litquidity is compensated to promote AutoPilot. Compensation details available upon request.