Good Morning and Happy Election Day! Jim Cramer said Monday market action suggests a Harris win. Joe Rogan endorsed Trump after a surprise Musk interview. Fed is expected to announce rate cut #2 this week. Jeff Bezos and OpenAI invested in robot startup Physical Intelligence at $2.4 billion valuation. Vitamin Shoppe owner's filed for bankruptcy, and Wall Street firms are starting to pay attention to mental health.

Plus, where Wall Street’s most influential stand on the election, America’s homebuyers are getting older, and 'Travel Tuesday' is gaining popularity.

Why do some investors always seem to be a step ahead of others? They’re reading Carbon Finance, the visual investing newsletter. Join 20,000+ investors today.

_{SQUEEZ OF THE DAY}

Botox on Credit

Ever since the pandemic and the rise of social media, America has seen a massive surge in cosmetic procedures. From aspiring TikTokers to even just the casual Instagram user seeking Botox or lip fillers to keep up with the Joneses, more Americans are willing to take on debt for a little bit of physical “enhancement.” 

And Wall Street is figuring out how to cash in. Fintech platforms and even banks are now offering options to cover everything from Botox to body contouring.

While for most Americans, insurance won’t cover these procedures, buy-now, pay-later (“BNPL”) companies are offering interest-free loans to consumers for the first six months. After six months, rates can soar over 30% - which is where these firms make their money.

Demand for procedures like liposuction surged 7% in 2023, and Wall Street is seeing a major opportunity. Cosmetic work appeals to financiers: it has a high-cash clientele and recurring business (think Botox, needing regular upkeep).

Earlier this year, $250 million in cosmetic loans were bundled and sold as bonds, swelling to $400 million due to investor demand. The bonds attracted investors because borrowers generally have solid credit scores and afford pricey procedures, making them less risky.

But there’s a catch for consumers: the Federal Reserve found that BNPL plans often target those with fragile finances, leading them to spend beyond their means.

Takeaway: There isn’t much that Wall Street isn’t willing to touch in 2024, especially as other revenue sources have dried up. While BNPL offers a way to finance non-insured procedures, you should remember the risks. The old adage still applies: don’t spend money you don’t have, especially for something like Botox or liposuction.

_{PRESENTED BY CARBON FINANCE}

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_HEADLINES

Top Reads

• Jim Cramer says Monday’s market action suggests a Harris win (CNBC)

• Joe Rogan endorses Trump (CNBC)

• Why banks are (probably) rooting for Donald Trump (YF)

• Private equity preps major veterinary care merger (Axios)

• Vitamin Shoppe owner's filed for bankruptcy (LAT)

• Mental health is becoming finance’s new bottom line (YF)

• Jeff Bezos, OpenAI invest in startup Physical Intelligence at $2.4B valuation (CNBC)

• Howard Lutnick returns to SPACs, despite past troubles (Axios)

• Where the most influential names on Wall Street stand on the election (Fox)

• Boeing workers vote on new contract that could end strike (ABC)

• Retailers brace for DEI blowback in lead-up to holiday shopping season (CNBC)

• Wall Street is counting on Powell to keep Fed cuts on track (YF)

• Berkshire Hathaway’s cash fortress tops $300 billion as Buffett sells more stock (CNBC)

• Nvidia leads surge in market cap amid AI chip demand (YF)

• Public pressure on private credit grows with loan sizes (Axios)

• Fox stock pops after political ads fuel revenue beat (YF)

_{CAPITAL PULSE}

Markets Rundown

Stocks post modest losses ahead of U.S. election day: U.S. equity markets closed lower on Monday as attention focused on the upcoming U.S. presidential election on November 5.

The energy sector outperformed, gaining over 1.5%, driven by strength in oil prices, which rose around 3% after OPEC+ delayed a planned production increase and amid geopolitical concerns involving potential Iranian responses to recent events. Bond yields ticked down, with the 10-year Treasury yield easing to 4.3% following recent highs.

Presidential election and FOMC meeting: The presidential race remains tight, raising potential for a drawn-out outcome if no clear winner emerges on election night, which could heighten market volatility.

However, long-term market performance is driven by economic fundamentals more than political events. The FOMC is expected to deliver a 0.25% rate cut at its meeting conclusion on Thursday, aligning with expectations for the second rate cut in this cycle, setting the policy range at 4.5% - 4.75%. A further cut is anticipated in December.

Historical market performance post-election:

• 1 day after: The S&P 500 has averaged a -0.3% return, positive 44% of the time since 1952.

• 1 month after: An average gain of 1.3%, positive 61% of the time.

• 6 months after: Gains of 5.5% on average, positive 72% of the time.

• 1 year after: A typical increase of 8.6%, with positive returns 61% of the time.

Movers & Shakers

• (+) Chewy ($CHWY) +6% after the pets product retailer is set to join the S&P MidCap 400.

• (+) Peloton ($PTON) +4% after Bank of America upgraded the exercise equipment company.

• (–) New York Times ($NYT) -8% after a downgrade by Barclays.

Private Dealmaking

• Blackstone in advanced talks to buy Retail Opportunity Investments for $3.4 billion

• Stonepeak bought Air Transport Services Group for $3.1 billion

• Physical Intelligence, an operating systems developer for robots, raised $400 million

• Beta Technologies, an electric airplane maker, raised $318 million

• Xcelerate, an ESG platform, raised $25 million

• Hippo Harvest, a greenhouse systems developer, raised $21 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

Intermezzo

Aside from the fact that they are brothers, Peter and Ivan Koubek seem to have little in common.

Peter is a Dublin lawyer in his thirties―successful, competent, and apparently unassailable. But in the wake of their father’s death, he’s medicating himself to sleep and struggling to manage his relationships with two very different women―his enduring first love, Sylvia, and Naomi, a college student for whom life is one long joke.

Ivan is a twenty-two-year-old competitive chess player. He has always seen himself as socially awkward, a loner, the antithesis of his glib elder brother. Now, in the early weeks of his bereavement, Ivan meets Margaret, an older woman emerging from her own turbulent past, and their lives become rapidly and intensely intertwined.

For two grieving brothers and the people they love, this is a new interlude―a period of desire, despair, and possibility; a chance to find out how much one life might hold inside itself without breaking.

“An exquisitely moving story about grief, love, and family.”

_{DAILY VISUAL}

America's Homebuyers are Older Than Ever

_{PRESENTED BY KALSHI}

Get Your Popcorn Ready. It’s Election Day!

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_{DAILY ACUMEN}

Nature of Excellence

In our pursuit of efficiency, we often overlook a crucial truth: mastery requires periods of apparent inactivity. A chess grandmaster studying a single position for hours isn't wasting time—they're laying the groundwork for strategic brilliance.

Our modern workplace celebrates constant activity: rapid responses, endless availability, perpetual motion. But this culture of continuous partial attention prevents us from reaching the mental depths where innovation thrives. Each notification breaks our concentration, keeping us swimming in shallow waters.

Quality thinking may not always be visible in the immediate output. Two strategy documents might appear identical, but the one backed by deep analysis will prove its worth in execution. The most valuable insights emerge only after we've moved past conventional wisdom into unexplored territory.

True excellence isn't about speed—it's about the depth of understanding we bring to essential challenges. In a world fixated on quick wins, the willingness to think thoroughly might be our most undervalued asset.

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Short Squeez Picks

• Why Gen-Zers are single and happy about it

• We need to talk about the emotional weight of work

• Mark Cuban on the side-hustle he’d start if he were a teenager

• The secret to better communication is stop assuming, start rephrasing

• People with a success mindset don’t waste time on these 5 things

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Memes of the Day