Dave Portnoy Purchases All Barstool Shares Back from PENN Entertainment (Axios)
CI Private Wealth Has Changed Its Name to Corient (ALM)
NewEdge Wealth Launches Investment Platform for HNWI and Institutions (Reuters)
Ten Mid-Size Banks Downgraded, Market Stability In Question
In a recent development that has sent ripples through the financial sector, Moody's Investor Services has taken the decisive step of downgrading the ratings of ten mid-sized U.S. banks. They have also placed several prominent institutions on a watchlist for potential future downgrades. This decision from Moody's comes less than one week after Fitch Ratings downgraded U.S. government debt from AAA to AA+. The move comes as a response to growing concerns over mounting credit risks within the banking industry, triggered by a number of factors including economic uncertainty, increased loan defaults, and the evolving regulatory landscape. The downgrades could potentially result in higher borrowing costs for the affected banks, impacting their ability to secure funds at favorable terms and potentially affecting their profitability. As investors closely monitor this situation for lasting signs, market dynamics are expected to shift, prompting institutions to reevaluate their risk management strategies and a broader reassessment of the sector's overall stability. This decision by Moody's underscores the critical need for banks to adapt swiftly to the changing financial landscape and reinforce their resilience in order to navigate these times successfully.
"We continue to expect a mild recession in early 2024, and given the funding strains on the U.S. banking sector, there will likely be a tightening of credit conditions and rising loan losses for U.S. banks."
In a recent Seed round totaling $6.9M, the Sacha Dragic Family Office, Hellen’s Rock Capital, invested in Rolla, a new app helping runners, cyclists, and other athletes compete and track their activity
Birdstop, a remote sensing company using drones and AI to collect detailed imagery, has secured $2.3M in funding through its Venture round, with a notable investment from the Goodrich Family Office, Timberline Holdings
With a recent injection of $22M from a Series B round, Kraftblock, a company building multifunctional energy storage solutions, secured support from the Louis Bacon Family Office, Moore Ventures
Kyverna Therapeutics, a medicine company helping individuals with autoimmune diseases, has raised $145M in their Series B extension round with the participation of the Kovner Family Office, CAM Capital
Electrical Bills May Decrease As Summer Comes to a Close
As the summer months end, electricity bills will inevitability decrease, but maybe not as much as we had hoped. In a post-pandemic world, Americans are paying 25% more for power than they were before 2020. Boston residents are paying 32 cents per kilowatt-hour, a 23% increase from last year. While it is natural for electrical bills to vary based on the season and location of the household, states will also have different legislation for electric pricing. For instance, in New Jersey, companies have the flexibility to hedge their prices up to three years in advance, resulting in a slower rate of price changes compared to a state like Florida. Fear of recession in 2022 caused individuals to increase their shares of utility stocks. With that fear dissipating and interest rates rising, investors are shifting their priorities. Utility as a sector is “lagging” compared to the overall S&P 500 sector activity. However, on the positive side, solar power production is expected to increase in 2023 by 23%, which will lower electricity rates.
"Still, a few percent off his electric bills is unlikely to change the habits of retired Air Force Lt. Col. Jeff Heller, of Canyon Lake, Texas. To save money, Heller keeps his upstairs thermostat set to 84 degrees in summer. “If it drops by 20%, I might be inclined to drop it by another degree,” he said.”
There is no doubt the COVID-19 pandemic had a significant impact on society, but it is especially apparent in the educational field. The Wall Street Journal reports that students who are behind academically don't just struggle in school; the problem extends into the workplace, and employers are spending millions trying to fix it. National productivity has fallen for the past five quarters, the longest stretch since 1948. Standardized test scores for fourth- and eighth-graders have fallen to 30-year lows. Additionally, the number of nurses actively employed is at its lowest in 40 years. Hospitals typically hire nurses immediately post-grad, before the completion of certifications. However, the increased number of failures on qualification exams is costing hospitals an average of $42,000 per hire. The U.S. Army has faced challenges, too, having to introduce an additional academic phase of boot camp. This comes after a 9% drop in recruits’ examination scores, as well as general communication issues. Since students did not receive the skills expected from employers at school due to the pandemic, a gap in readiness is excessively apparent. Technical skills are not up to par and soft skills are equally as scarce. Employment professionals have even written self-help guides regarding hygiene, productivity, and conflict resolution in the workplace.
"Talent First, a business-led workforce-development organization in Grand Rapids, Mich., is encouraging employers to stop trying to hire based on skill. Instead, hiring managers should look for a willingness to learn, said President Kevin Stotts. “Employers are saying, ‘We’re just trying to find some people who could fog the mirror.’”"
Potential Windfall Tax Looms Over Italian Banking Sector
A spotlight on Italy's banking sector has triggered profound reverberations across the financial landscape after the European Central Bank hiked interest rates. A recent report from Fortune reveals the Italian government has proposed a "windfall profits tax" on banks, aimed at redistributing approximately $10 billion in excess profits. While the decision awaits approval from parliament, it has already sent shockwaves through both the financial industry and the stock market. The government has proposed two policies. The first imposes a levy of 40% on the difference between net interest income in 2022 and 2021 (when the difference exceeds 5%). The second option targets the difference in net interest income between 2023 and 2021 (with a floor of 10%). Assumably, the option that generates higher revenue for the government will be put into effect. The funds from this tax would help reduce fiscal pressure on families and companies. As investors and analysts engage in important discussions about the short-term market turmoil and long-term fiscal implications, this unfolding situation stands as a compelling case study, offering invaluable insights into the nuanced interactions that define the modern financial ecosystem.
"We have been saying for months the ECB was wrong to raise rates and this is an inevitable consequence."
Malcolm Price is set to join Wells Fargo as Head of Financial Sponsors within their CIB team
Price arrives with 35 years of experience at Credit Suisse, where he developed and led their financial sponsors division. He also worked in leveraged finance and infrastructure, as well as utilities and renewables
He is set to work with Tim O’Hara, Head of Banking, and Scott Warrender, Head of Coverage within Banking
Hundreds of Credit Suisse employees left the firm earlier this year fearing collapse. UBS has since overtaken Credit Suisse (Reuters)
Written by:
Jonathan Lischetti & Mae O'Neill
Data & Research Interns
FINTRX delivers an industry-leading suite of private wealth data and research solutions to the alternative investment space and private capital markets. Engineered to help clients identify and access family office and RIA capital intuitively, the FINTRX platform ensures accurate and updated data and research on 850,000+ private wealth records globally. To subscribe to our newsletter and see previous versions, click below.
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