Soaring debt and deficits causing worry about threats to the economy and markets

Good Morning,

This morning's news includes a mixed bag for the stock markets, with the US seeing highs and lows and European and Japanese markets mostly down. There are also interesting stories about earnings reports from Xero, Palo Alto Networks, and 2 Cheap Cars, an Auckland man fined for getting too close to an orca, and the ongoing saga of Elon Musk's company Tesla. On the deal flow front, there are stories about a mystery suitor for Kiwi honey producer Comvita, Star Entertainment receiving casino interest from Hard Rock, and government-backed green tech firm going broke.

Let’s jump in!

Before The Bell

Markets

• US stock markets saw mixed results: Dow Jones fell sharply, Nasdaq hit record highs, S&P 500 flat, and small caps lost ground (TRP)

• European stocks closed mostly down, with concerns about interest rate cuts hitting the STOXX 600 and major indexes like FTSE MIB and CAC 40 (TRP)

• Japanese stocks ended slightly lower despite early gains from positive economic data and strong US tech earnings. A late-week selloff mirrored Wall Street as hopes for US interest rate cuts faded (TRP)

Earnings & Data

• Comvita to reduce costs a further $10m on ‘prolonged weakness’ (NBR)

• Gentrack upgrades FY24 revenue and earnings guidance (NBR)

• Expected sales momentum fails to materialise for Michael Hill (NBR)

• Manawa Energy counts on reset for growth and value (NBR)

• Traders are pricing in a big move for Nvidia’s shares after the chipmaker reports earnings on Wednesday, though expectations for volatility are more muted than in the past, U.S. options markets show (Reuters)

• Palo Alto Networks tumbles on earnings once again. It’s another chance to buy the cyber stock (CNBC).

• Xero results gives something for ‘bulls and bears’ (NBR)

• Questions raised about My Food Bag’s return to dividends (NBR)

• Used-car dealer 2 Cheap Cars has reported a record annual net profit after tax of $6.2 million, up 383% despite a slight dip in vehicle sales (NBR)

• John Key, other Palo Alto board members sued for insider trading (NBR)

News Summary

Monday

• Jarden ‘sticking to its knitting’ (NBR)

• Police hunt for Australia's former most wanted man after ankle monitor removed (9 News)

• Lithium miners shake up trading to tackle wild price swings (AFR)

Tuesday

• Anti-vaccine activist Liz Gunn has been found guilty of assault following an incident at Auckland Airport in 2023 (Stuff)

• An Auckland man has been slapped with a $600 fine after performing a "body slam" next to an orca from a boat (1News)

• Donald Trump's former fixer and lawyer Michael Cohen acknowledged on his final day of testimony that he stole thousands of dollars from his former boss's company (BBC)

Wednesday

• Aussie scam losses are decreasing (NBR)

• US Mortgage Rates Fall Below 7% for First Time Since Early April (BBG)

• Embattled Segantii Can Exit 97% of Portfolio Within Five Days (BBG)

Thursday

• Air New Zealand passengers in five-hour ordeal as Dunedin flight turns back to Auckland (Herald)

• Elon Musk’s X accountable for hate speech posts in Australia: ruling (AFR)

• JPMorgan to pay $100 million over CFTC trade reporting violations (RT)

Weekend

• ‘Pretty suspicious’: Wellington man finds guns, ammunition while metal detecting (Stuff)

• Albanese’s diary reveals the CEOs who scored access in 2023 (AFR)

• Man behind $395m NDIS investment fraud gets 12 years in prison (AFR)

Deal Flow

Investments / M&A

Australia & New Zealand

• Mystery suitor for Kiwi honey producer Comvita revealed (AFR)

• Star shares surge after casino confirms Hard Rock interest (AFR)

• Government-backed green tech firm goes broke, gets acquired for $5m (AFR)

• HMC Capital has kicked off its push into the private credit sector with a A$127.5 million buyout of Melbourne’s Payton Capital (AFR)

• Victa lawnmower brand hits the block via 333 Capital (AFR)

• Adamantem Capital doubles down on Environmental Opportunities Fund (AFR)

• Five V Capital signs $200m-plus Habit Health acquisition (AFR)

Key Global

• Firefly Aerospace Backers Explore $1.5 Billion Sale (BBG)

Other Global

• AMCI launches $47.4m block trade in Jupiter Mines; taps Barrenjoey (AFR)

• Incitec’s Indonesian suitor has investors brushing up on Cooper’s woes (AFR)

• TPG Capital wines and dines LPs ahead of Novotech exit (AFR)

• French drugmaker Sanofi on Tuesday announced it is collaborating with artificial intelligence company OpenAI and Formation Bio to boost its drug development projects through the use of Artificial Intelligence (Reuters)

• Smart heads bet BHP’s Anglo American bid gets over finish line (AFR)

VC & Fundraising

• Biotech start-up raising $20m pre-IPO amid missed payment claims (AFR)

Equity Raises

Australia & New Zealand

• ASX-listed Alpha HPA on Tuesday upsized its equity raising to facilitate the development of its high-purity alumina (HPA) refinery in Gladstone, Queensland, to A$175-million (MW)

Other Global

• Costa family-backed GO.FARM seeks $300m for new agricultural fund (AFR)

• Patriot Battery Metals in $44m capital raise; Euroz, Argonaut on hand (AFR)

Debt, Restructuring & Bankruptcy

• Soaring debt and deficits causing worry about threats to the economy and markets (CNBC)

• Panthera Finance Pty Ltd, the nation’s biggest privately owned debt collector, is blacklisted from operating in Victoria due to a 2020 federal court ruling that it had unduly harassed customers for money they did not owe (Guardian)

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