THE DRAGON ROARS AGAIN

Good afternoon,

The big story today? The smart money is looking East. While we're watching the Fed and wondering about tariffs here at home, global investors are quietly placing massive bets on a Chinese comeback for 2026.

Elsewhere, four quant firms are teaming up to take on Citadel, and McKinsey wants you to use AI in your job interview. Times are changing.

Getting started.

The Pulse

Markets

• Japan is heating up. The Nikkei 225 jumped 1.5% (now up 6.5% YTD) on hopes for a fiscally dovish government.
  • The Japan 5Y yield hit 1.6%, its highest level since 2000.
  • The Yen slid to lows we haven't seen since July 2024.
• US stocks stumbled yesterday. We're seeing a clear rotation out of tech and into small-caps.
  • The Nasdaq had its worst session in a month.
  • The Russell 2000 is on a tear. It has beaten the S&P for nine straight days, the best run since 1990.
• The UK is joining the party. The FTSE 100 also hit an all-time high.
• Korea’s KOSPI index is going vertical.
• Emerging Markets are up 5.5% to start the year.
• Commodities are flying. Gold, silver, copper, and tin all hit fresh all-time highs.

Earnings

• Bank of America beat expectations on both top and bottom lines. Strong net interest income and trading revenue made up for flat investment banking fees. (CNBC)
• Citigroup also beat estimates. Investment banking fees surged 35%. Net income was down 13%, but that was mostly due to costs from exiting Russia. (CNBC)
• This week's lineup:
  • Today: TSMC, BlackRock, Morgan Stanley
  • Friday: State Street
• See the full calendar here.

Prediction Markets

• History has seen worse ideas (Polymarket)

Headline Hunt

• The US is still trying to buy Greenland. (WSJ)
• The price tag for Greenland could be $700B. (NBC)
• Wholesale inflation (PPI) is up 3% year-over-year. (CNBC)
• Retail sales bounced back in Q4. (BBG)
• The Fed says the economy is picking up steam. (BBG)
• Wall Street profits rose in Q4 thanks to a resilient consumer. (RT)
• Global investors are betting big on China stocks and currency for 2026. (BBG)
• PIMCO thinks this Emerging Markets rally will last for years. (BBG)
• Risky borrowers are flooding the market to satisfy yield-hungry investors. (BBG)
• Biotech IPOs hit a decade low, but investors see a rebound coming. (RT)
• Bain Capital tapped David Gross as its sole managing partner. (FT)
• Airbnb poached Meta’s head of GenAI to be its new CTO. (CNBC)
• BP is taking a $5B hit on its green energy division. (FT)
• Elon’s Starlink is helping Iranians bypass internet blackouts. (BBG)
• The US is pausing immigrant visas from 75 countries. (BBG)
• Epstein promised victims admission to Columbia and NYU. (WSJ)

The Deal Room

M&A / Investments

• Toyota bumped its offer for Toyota Industries by 15% to $39B after Elliott pushed for a better price.
• Stephen Ross has received offers over $15B for the Miami Dolphins.
• Neuberger Berman is buying a minority stake in tax software firm Ryan. The $1.2B investment values the company at $7B.
• Canadian Natural Resources is looking to buy natural gas assets from Tourmaline Oil Corp for $1B.
• Mission Produce is merging with Calavo Growers in a deal worth $483M.
• KKR is buying a 50% stake in RWE's UK offshore wind projects.
• Coca-Cola scrapped plans to sell Costa Coffee after bids from TDR Capital and Bain Capital came in too low.
• Carlyle is eyeing an equity stake in LNG firm Commonwealth.
• Citigroup may sell more of its Mexican unit Banamex before an IPO.

Venture Flow

• Skild AI, a robotics software startup, raised $1.4B at a $14B valuation. SoftBank led the round.
• Etched.ai, an AI chip startup, raised $500M at a $5B valuation. Stripes led.
• osapiens, a sustainability software firm, raised $100M at a $1B+ valuation. BlackRock and Temasek led.
• Listen Labs raised $69M for AI customer research. Ribbit Capital led.

IPO / Direct Listings / Issuances / Block Trades

• Baidu ($52B market cap) is thinking about upgrading its Hong Kong listing to primary status.
• Czechoslovak Group wants to raise $3.5B in an Amsterdam IPO. They're targeting a $35B valuation.
• Odido, a Dutch telecom backed by Apax and Warburg Pincus, is filing for a $1.2B IPO.

Bankruptcy Watch

• Hedge fund Arini Capital is contesting the inclusion of Ardagh's senior unsecured bonds in a CDS auction.

The Debt Desk

• France raised $11.7B in bonds despite worries about its fiscal health.
• Banks tightened pricing on $8.5B of leveraged loans for the Blackstone and TPG buyout of Hologic.
• JPMorgan kicked off Q1 issuance by selling $6B of investment-grade bonds.
• Bolivia secured a $4.5B package from the Inter-American Development Bank.
• TPG is buying $2.4B of consumer loans from OneMain.
• Lenders are putting together a $2.3B debt package for Astorg's sale of IQ-EQ.
• HSBC is testing demand for a risk transfer on a $2.3B portfolio.
• Lenders upsized their loan to Global Healthcare Exchange to $1.6B.
• Angola is rolling over a $1B loan and raising another $500M.

Bankruptcy Watch

• Saks Global filed for Chapter 11. They secured $1.75B in financing to keep the lights on.
• Goldman Sachs is taking over the Radford Studio Center after the owner defaulted on a $1.1B mortgage.

Fresh Capital

• Arab Energy Fund wants to grow its PE business to $12B.
• Sixth Street raised $4.4B for its third European private credit fund.

Crypto Corner

• Visa is integrating stablecoins into its payment rails.
• Binance's market share has dropped to a four-year low.

Today’s Meme Pick

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