Good morning! Goldman Sachs is doubling down on private credit, merging three key groups into the new Capital Solutions Group. Shake Shack is gearing up for massive expansion, planning to triple its locations.

The market's not expecting any rate cuts in 2025, and bank stocks are about to face a serious test this earnings season. Biden is rolling out another round of student loan relief with just days left in office.

Despite stronger-than-expected holiday results, Wall Street remains unimpressed with retailers. Donald Trump Jr. joined Kalshi as a strategic advisor, and Bradley Cooper is opening a new cheesesteak joint in the East Village.

Simplify your financial modeling and presentations—see how Macabacus can help you deliver seamless results under pressure.

_{SQUEEZ OF THE DAY}

Elon to Rescue TikTok?

The fate of TikTok’s U.S. operations is hanging by a thread, and Elon Musk might just be the one to grab the other end. With the Supreme Court likely to uphold a ban on the app by January 19 unless its Chinese parent, ByteDance, sells its U.S. business, Beijing is reportedly considering a contingency plan: selling TikTok’s U.S. operations to Musk.

Under one scenario, Musk’s X (formerly Twitter) would take over TikTok’s U.S. operations, merging two massive social platforms. With over 170 million U.S. users, TikTok could supercharge X’s efforts to attract advertisers and provide a data goldmine for Musk’s AI company, xAI. The move could also help Musk transform X into a full-scale multimedia powerhouse.

TikTok, however, has firmly denied the rumors, calling the reports “pure fiction.” Meanwhile, ByteDance continues to fight the ban in court, arguing that it violates the free speech rights of millions of U.S. users. Despite this, the Supreme Court seems poised to side with the government, citing national security concerns over TikTok’s Chinese ownership.

Even Trump—who returns to the White House on January 20—has hinted at a more diplomatic resolution. The president-elect has called for a delay to the ban, hoping to broker a deal that could keep TikTok operating in the U.S.

Takeaway: If Musk were to buy TikTok, it wouldn’t just save your favorite app—it could redefine the social media landscape. By merging TikTok’s unparalleled reach with Musk’s tech-driven ambitions, this deal could create a powerhouse that reshapes digital advertising, AI, and entertainment. Whether this is all fiction or the start of a massive power shift, one thing’s certain: everyone from Wall Street to Silicon Valley will be watching closely.

_{PRESENTED BY MACABACUS}

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_HEADLINES

Top Reads

• Goldman Sachs to deepen exposure to booming private credit industry (YF)

• Market is predicting no rate cuts in 2025 (CNBC)

• Big bank optimism is about to be put to the test (YF)

• Shake Shack plans monster expansion (Fox)

• Retailers post early holiday results — and Wall Street isn’t impressed (CNBC)

• Fidelity joins the boring but vital stock transfer agent market (Axios)

• Kalshi names Donald Trump Jr. as strategic adviser to prediction market firm (CNBC)

• Mark Zuckerberg has turned on the elites, even his own (Axios)

• 'Ghost jobs' become serious problem for people looking for work (Fox)

• Eli Lilly CEO expects new weight loss pill to be approved next year (CNBC)

• Apollo’s Zelter sees private, public market barriers falling (YF)

• Nasdaq slides as rate cut fears drag on Big Tech (YF)

• Biden announces new round of student loan handouts (Fox)

• RedNote surges as TikTok faces ban (CNBC)

_{CAPITAL PULSE}

Markets Rundown

Stocks Begin the Week Mixed as Bond Yields Tick Higher

Stocks were mixed Monday, with the Nasdaq lagging the S&P 500 and Dow Jones as bond yields climbed. The 10-year Treasury yield rose to 4.79%, its highest since October 2023.

Higher yields—driven by expectations of sticky inflation, a shallower Fed rate-cutting cycle, and a resilient economy—have pressured stocks. However, the S&P 500 is down just 4% from its all-time high, and the Nasdaq is down 5%, which is within the normal correction range.

Given the solid economic and earnings backdrop, it is not expected that these corrections will lead to prolonged bear markets.

All Eyes on Inflation Data This Week

This week, the spotlight is on inflation, with December's CPI report due Wednesday. Headline CPI is expected to rise to 2.9% year-over-year, up from 2.7% last month, driven by higher energy prices. Core inflation is projected to remain flat at 3.3%.

Moderating wage growth, with hourly earnings falling from 4.0% to 3.9%, should help ease services inflation. Overall, we expect inflation to stay contained between 2.0%-3.0%, with no signs of a return to post-pandemic levels above 4.0%.

Policy Uncertainty Looms, but the Economy is Solid

With Inauguration Day nearing, markets are focused on potential policy priorities like tariffs, immigration reform, taxes, and deregulation. While uncertainty persists, markets are primarily driven by fundamentals.

Key drivers include a strong labor market supporting consumption, S&P 500 earnings growth projected to exceed 10% in 2025, and central banks continuing to ease rates, albeit more gradually.

After two years of strong market gains, some moderation and volatility are expected, offering opportunities for investors to diversify, rebalance, and add quality investments at better prices.

Movers & Shakers

• (+) Howard Hughes Holdings ($HHHC) +10% after Bill Ackman offered to acquire the real estate company.

• (+) elf Beauty ($ELF) +6% after Morgan Stanley upgraded the cosmetics company.

• (–) Moderna ($MRNA) -17% after the vaccine maker cut its 2025 sales guidance.

Private Dealmaking

• Johnson & Johnson acquired Intra-Cellular Therapies for $14.6 billion

• Clearwater Analytics bought Enfusion, a hedge fund SaaS provider, for $1.5 billion

• GSK bought IDRx, a cancer therapies developer, for $1.15 billion

• T-Mobile bought Vistar Media, a tech solutions provider, for $600 million

• Truveta, a health data platform, raised $320 million

• Tune Therapeutics, an epigenome editing company, raised $175 million

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

_{BOOK OF THE DAY}

Look Again

Have you ever noticed that what is exciting on Monday tends to become boring on Friday? Even passionate relationships, stimulating jobs, and breathtaking works of art lose their sparkle after a while. As easy as it is to stop noticing what is most wonderful in our lives, it’s also possible to stop noticing what is terrible. People get used to dirty air. They become unconcerned by their own misconduct, blind to inequality, and are more liable to believe misinformation than ever before.

Now, neuroscience professor Tali Sharot and Harvard law professor (and presidential advisor) Cass R. Sunstein investigate why we stop noticing both the great and not-so-great things around us and how to “dishabituate” at the office, in the bedroom, at the store, on social media, and in the voting booth.

This groundbreaking and “sensational guide to a more psychological rich life” (Angela Duckworth, New York Times bestselling author), based on decades of research, illuminates how we can reignite the sparks of joy, innovate, and recognize where improvements urgently need to be made.

The key to this disruption—to seeing, feeling, and noticing again—is change. By temporarily changing your environment, changing the rules, changing the people you interact with—or even just stepping back and imagining change—you regain sensitivity, allowing you to identify more clearly the bad and more deeply appreciate the good.

“Disrupting our well-worn routines, both good and bad, can rejuvenate and reset our brains for the better.”

_{DAILY VISUAL}

US Household Sector Enters 2025 in Excellent Shape

_{PRESENTED BY ELF LABS}

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Elf Labs controls 100+ trademarks and 400+ copyrights for characters like Peter Pan, Cinderella, and Snow White, with sights set on the $2T entertainment and merchandising market.

Between global merch, toy, and apparel deals and patented AR, VR, and AI tech, Elf Labs is reinventing this iconic character portfolio to create unparalleled entertainment–and revenue opportunities. 

(They’re launching 20 new product lines in 30 markets over the next 18 months, so you better hurry.)

Don’t miss your chance: Invest today to get 20% bonus shares in Elf Labs.

_{DAILY ACUMEN}

Decisions

“Decisions are easy, choices are hard.

A good decision is our best analysis of the facts, options and risks. If it’s too close to call, flip a coin, because it’s too close to call.

On the other hand, a choice involves understanding our priorities, evaluating our preference for risk and sometimes, changing our minds. None of these are easy.

If we face a difficult choice, it’s helpful to stop thinking about it as a decision. It’s a choice. Decisions are strategic, choices are personal.”

-Seth Godin

_{ENLIGHTENMENT}

Short Squeez Picks

• How much happiness does money really buy?

• Bradley Cooper opened a new cheesesteak restaurant in the East Village

• How to answer the “why we should hire you” question

• 4 phrases couples need to use more

• Why CEOs often feel lonely

_{MEME-A-PALOOZA}

Memes of the Day